Is the Market Party Just Getting Started or Are We Just Fooling Ourselves?

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What to know:

  • Equity bear markets are like bad movies: they often come with multiple plot twists, featuring double-digit rallies, as the wise folks at Goldman Sachs will tell you.
  • Though Wednesday’s market uplift might have you dreaming of bull runs, caution is the name of the game, despite all that glorious optimism.

Don’t let Wednesday’s market gyrations fool you. The S&P 500 embarked on a dance not seen since 2008, while bitcoin (BTC) and the broader crypto arena were throwing confetti like there was no tomorrow—thanks to the power of the CoinDesk 20 (CD20) index.

The so-called rally was ignited by none other than President Trump, who dropped the bombshell of a 90-day tariff truce. Social media went wild, painting fantasies of a never-ending bull run in both stocks and crypto. Yet, analysts at Goldman Sachs, the cautious sages of Wall Street, warn that those thrilling multiweek, double-digit equity rallies are hardly a rarity in the shadowy realm of bear markets.

“In the wilderness of bear markets, the slightest shifts can create tidal waves,” proclaimed Goldman’s brainy team, guided by the illustrious Peter Oppenheimer. Their Tuesday missive, dramatically titled “Bear Market Anatomy – the path and shape of the bear,” could easily rival a thriller novel.

Since the 1980s, there have been 19 global bear market rallies, running an average of 44 days, all while the MSCI AC World returns a tempting 10% to 15%—talk about a wild ride! 🎢

“In the great bear markets of history, we’ve seen a comedy of major double-digit rallies before the final curtain calls,” remarked the ever-keen Callum Thomas, founder and chief keeper of the charts at Topdown. He took to X to musingly ask, “Is the 90-day hop a Bear Market Rally (BMR)?” 🐻💃

Whether this recent leap signifies a fresh bull run or is merely a fleeting bear market blip will only reveal itself with time, as is the case with a fine mystery novel. Yet, the telltale signs of a sustainable bottom—the alluring valuations, dire market positioning, handy policy interventions, and a lull in macroeconomic turbulence—are conspicuously absent.

With the Federal Reserve playing the waiting game and Trump pausing tariffs for a mere 90 days, tensions are likely to flare up again. Add to that the rising tariffs on China and, newsflash: stocks are still not in the bargain bin.

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2025-04-10 12:21