bear market

noun

Definition of bear market

: a market in which securities or commodities are persistently declining in value — compare bull market

Examples of bear market in a Sentence

Recent Examples on the Web

Investors have been spooked by regulators’ clash with ICOs and the overall bear market in... Paul Vigna, WSJ, "Raising Money in the Crypto World Has Gotten a Lot Harder," 31 Mar. 2019 Hong Kong’s Hang Seng lost 0.7 percent and officially entered a bear market, having fallen 20.3 percent from its recent peak reached Jan. 26. Marley Jay, The Seattle Times, "Stocks are mixed amid tech gains, insurance losses," 11 Sep. 2018 The surge in bunds has come even as some prominent commentators heralded the start of a bear market in global bonds. John Ainger, Bloomberg.com, "Europe's Bond Rally Set to Extend Into April on Debt Repayments," 26 Mar. 2018 The more muted returns, coupled with the five-year bear market in emerging market equities before this surge, mean emerging market value stocks are still trading at relatively attractive prices. Paul J. Lim, New York Times, "Bargain Hunters Turn to Emerging Market Stocks," 12 Jan. 2018 With payrolls figures indicating a labor market at or near full employment and market luminaries calling the start of the bond bear market, traders will be keenly focused on the report for signs inflation is finally on the upswing. Joanna Ossinger, Bloomberg.com, "Five Things You Need to Know to Start Your Day," 11 Jan. 2018 When will the next bear market for U.S. stocks begin? Michael Wursthorn, WSJ, "The Battered Bull Market Is Limping Into 2019," 2 Jan. 2019 The last bear market for the index ended in March 2009. Marley Jay, The Seattle Times, "Wall Street ends higher with help from tech and health care," 12 Dec. 2018 After a nearly 10-year bull run, the index is the only one of the major U.S. stock benchmarks teetering on the brink of a bear market—typically defined as a fall of at least 20% from a recent high. Jessica Menton, WSJ, "Small-Cap Stocks Teeter on the Edge of a Bear Market," 12 Dec. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'bear market.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of bear market

1858, in the meaning defined above

History and Etymology for bear market

bear entry 1 (one that sells in expectation of a price decline)

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Last Updated

26 Apr 2019

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The first known use of bear market was in 1858

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More Definitions for bear market

bear market

noun

Financial Definition of bear market

What It Is

A bear market is a period of several months or years during which securities prices consistently fall. The term is typically used in reference to the stock market, but it can also describe specific sectors such as real estate, bond or foreign exchange. It is the opposite of a bull market, in which asset prices consistently rise.

How It Works

Identifying and measuring bear markets is both art and science. One common measure says that a bear market exists when at least 80% of all stock prices fall over an extended period. Another measure says that a bear market exists if certain market indexes -- such as the Dow Jones Industrial Average and the S&P 500 -- fall at least -15%. Of course, different market sectors may experience bear markets at different times. The bear market that occurred in the U.S. equity markets from 1929 to 1933 is one of the most famous bear markets in history.

The causes and characteristics of bear markets vary, but most financial theorists agree that economic cycles and investor sentiment both play a role in the creation and momentum of bear markets. In general, a weak or weakening economy -- indicated by low employment, low disposable income, and declining business profits -- ushers in a bear market. The existence of several new trading lows for well-known companies might also indicate that a bear market is occurring. It is important to note that government involvement affects bear markets. Changes in the federal funds rate or in various tax rates can encourage economic expansion or contraction, ultimately leading to bull or bear markets.

Falling investor confidence is perhaps more powerful than any economic indicator, and it also often signals a bear market. When investors believe something is going to happen (a bear market, for example), they tend to take action (selling shares in order to avoid losses from expected price decreases), and these actions can ultimately turn expectations into reality. Although it is a difficult measure to quantify, investor sentiment shows through in mathematical measurements such as the put/call ratio, the advance/decline line, IPO activity and the amount of outstanding margin debt.

Regardless of their exact beginnings and ends, bear markets typically have four phases. In the first phase, prices and investor sentiment are high, but investors are beginning to take profits and exit the market. In the second phase, stock prices begin to fall quickly, trading activity and corporate earnings fall, and positive economic indicators are below average. Investor sentiment also gets more pessimistic and some investors panic. Market indices and many securities reach new trading lows, trading activity continues to decrease, and dividend yields reach historic highs. In the third phase, prices and trading volume increase somewhat as speculators enter the market. In the fourth and final phase, stock prices continue to fall, but they do so at a slower pace. As investors find prices low enough and as they react to good news or positive indicators, bear markets often eventually give way to bull markets.

Why It Matters

Bear markets cost investors money because security prices generally fall across the board. But bear markets don't last forever, and they don't always give advance notice of their arrival. The investor must know when to buy and when to sell to maximize his or her profits. As a result, many investors attempt to "time the market," or gauge when a bear market has begun and when it is likely to end.

Analysts spend thousands of hours trying to mathematically determine what will trigger the next bear market and how long it will last, and technical analysis is especially prevalent in this effort.

For details on the history of the words that describe market trends, read The Quirky And Brutal Origins Of The Terms 'Bear' And 'Bull.'

Source: Investing Answers

bear market

noun

English Language Learners Definition of bear market

finance : a market (such as a stock market) in which prices are going down

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Rhyming Dictionary: Words that rhyme with bear market

Nglish: Translation of bear market for Spanish Speakers

Britannica.com: Encyclopedia article about bear market

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