Bear vs Bull market

Change in Economic Activity

Because the businesses whose stocks are trading on the exchanges are participants in the greater economy, the stock market and the economy are strongly linked.

A bear market is associated with a weak economy. Most businesses are unable to record huge profits because consumers are not spending nearly enough. This decline in profits directly affects the way the market values stocks.

In a bull market, the reverse occurs. People have more money to spend and are willing to spend it. This drives and strengthens the economy.

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