This market is more bear than bull
Few analysts will declare the latest market rally as the start of something bigger. Tamara Keith reports why several negative indicators make it more bear market rally than bull.
Traders work the floor at the New York Stock Exchange (Neilson Barnard/Getty Images)
More on Wall Street
TEXT OF STORY
Renita Jablonski: All eyes are on the stock market today after a strong week of trading. The Dow finished up 174 points yesterday. It closed at 7,924. That's up more than 20 percent since the market's low earlier this month. Tamara Keith takes a look at what that means, or doesn't mean.
Tamara Keith: There's a common belief that a 20 percent rise in the Dow or the S&P is the sign of a new bull market. And the Dow has risen 21 percent since March 9.
But Charles Geisst, a professor of finance at Manhattan College, says this is more likely what they call a bear market rally. He says there are way too many negative economic indicators out there for this to be a real bull market.
Charles Geisst: Right now, the market's rally is an indicator of popular psychology amongst some investors and traders that things are over with, but it's not much more than that.
So, what's going on? Geisst says this is a trader's market.
Geisst: Most retail investors, those who sit home and do their own investing, are staying away from this sort of rally. So this is mostly professionals just jumping in and out for a few bucks here and there.
He says that during The Great Depression, there were bear market rallies. They got people's hopes up, only to be followed by further declines.
In Washington, I'm Tamara Keith for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.