Are The Stocks Really Cheap or Is a Bear Market Upon Us?

Researching and analysing are the primary ways of knowing the market conditions and possible stock movements. However, getting information is one thing while knowing which formation is true is a whole other thing. Perma bulls or those people that seem perpetually upbeat about the upcoming market directions can fool you into thinking that you are still in a bull market. This could become a fatal loss for those who are gullible. That’s why, all traders must be wary and must employ logic to accurately predict the next market movement. Let us now examine the current global economic conditions to see if a bear market is upon us.

Look at the following factors that indicate that the market might be becoming bearish.

1. Commodities have been steadily declining in value. This is a common early sign of impending deflation.

2. The awaited interest rate hike from the Federal Reserve this year that will result in the further appreciation of the dollar will have a negative effect on the exported goods and subsequently, the multinational companies in America. This delay in interest rate is seemingly driving the market to become bearish. This will also inexplicably lead to a hike in borrowing costs which means that companies will have a difficult time in bolstering growth.

3. Slower growth of the Asian giant that is China is dragging other economies especially the emerging markets which depend on the Chinese demand for goods and services. China has been one of the reasons for the economic development in many countries and its slowdown will also mean the same for the many countries in relation with including the US.

4. Less expenditures for US consumers and cost cutting of US companies have added to the approaching bearish market.

The factors listed here shows that a bear market is indeed upon us. The global economic trend is down which will pull down the US stocks as well. Do more research and see for yourself the different factors that are pointing to it and act accordingly. Do not risk your investment in a bet you know you’ll lose. Decide wisely.