Understanding Financial Jargon Amid Trump's Trade War

This article clarifies financial terms like bear markets, bull markets, dead cat bounce, capitulation, and recession amidst President Trump's trade policies. It explains these concepts in light of recent economic developments, including the effects of tariffs and the assessment of recession probabilities.

Amid President Donald Trump's trade war, financial terms such as bear markets, bull markets, and dead cat bounce have become increasingly relevant as tariffs shake the global economy. This article serves as a guide to understanding this financial terminology, shedding light on both market trends and investor behavior.

A bear market, reflecting a 20% drop in indexes like the S&P 500, suggests a market in decline, much like a hibernating bear. Conversely, a bull market indicates charging growth. A 'dead cat bounce' describes a brief recovery during market freefall, highlighting temporary investor optimism.

Capitulation marks the moment investors surrender to falling prices, often out of fear, potentially indicating a market bottom in hindsight. Recession, marked by economic shrinkage and rising unemployment, is a longer-term concern. Despite recessive fears, recent trade announcements have temporarily allayed recession estimates by entities like Goldman Sachs.

(With inputs from agencies.)