Category: Uncategorized

bears

First of all, let’s get the pronunciation out of the way; bear is pronounced /beə/, rhyming with “hair”. Don’t make the terrible mistake of saying “beer” /bɪə/ (which rhymes with “here”), nobody will be impressed.

So, what is this animal doing in financial markets? Well, A bear is an investor who’s downbeat about the economic situation, pessimistic about the market and so thinks that the value of an asset, or of the market as a whole, is going to decline.

Consequently, a bear market is a pessimistic market in which asset prices fall for a prolonged period of time – more technically, it’s when prices have fallen 20% or more after a recent peak.

“World markets are bearish due to the impact of the coronavirus and fell across the board in yesterday’s trading”.

bear market

“bear markets are usually characterised by investors arguing themselves out of buying. That’s why we always miss the bottom.”

Merryn Somerset Webb Financial Times March 13 2020

A popular saying is

“the best thing you can do in a bear market is play dead”

i.e. sit tight and wait for things to pass or maybe invest in liquid, short term instruments.

The adjective relating to bear is bearish

Japanese stocks are well placed to confound the sceptics. From coronavirus to corporate governance changes, foreign investors are too bearish

Financial Times February 11 2020

while the opposites to bears and bearish are bulls and bullish.

deficit

Generally speaking, there is a deficit when an amount falls short, or doesn’t attain or reach, a required level.

Those with a moral deficit put on a good show, and sleep like a baby.

Paul Newman

the Philippines looks to geothermal energy to reduce its energy deficit on the island of Mindoro

Financially and economically speaking, there is a deficit when more money is spent than received i.e. outflows of money exceed inflows of money.

Many governments have run deficits since the financial crisis, that is they have spent more money than they raised through taxation. However, this can be controversial as some politicians view running a fiscal deficit as “living above your means“.

Armed with a $6.4 billion arsenal to fight the coronavirus and its fallout on the economy, this year’s expansionary Budget could run a historic deficit of $10.9 billion – the highest in recent times.

Straitstimes.com February 19 2020

A trade deficit refers to an imbalance between the amount spent on imports and the amount earned on exports.

Trump has pledged to narrow the trade deficit and bring manufacturing back to the United States

CNN February 5 2020

Related words are the adjective “deficient” and the noun “deficiency“

Although he boasts about his negotiating skills, they appear somewhat deficient.

Health care systems around the world denounce deficiencies in medical supplies.

What is the opposite of a deficit? If you are a Spanish speaker then maybe you fall into the common mistake of saying “a superavit” which, while it may bring smiles to many faces, won’t forward your career. It’s not a superrabbit,

it’s actually a surplus.

And I leave you with something to ponder, or think long and carefully about, is it possible to have a moral surplus?

outperform

Analysts have been saying they expect “expect emerging markets to outperform in 2020” so what does that mean? Well, I’m sure you understand the meaning of “to perform” which is to accomplish something or obtain results. The prefix (i.e. the bit you put in front of a word) OUT has a sense here of doing something comparatively better than others. So, putting the two meanings together, to outperform logically means to get better results or to do something better than others have done. In other words, some analysts think emerging markets will obtain better economic results than other developed markets.

If you have every tried to buy anything on eBay then maybe you have felt frustrated because someone “outbid” you – in other words, you offered let’s say €1,500 for a second hand scooter but someone else placed a higher bid, or offer, of €1,550 and so bought it instead of you.

Once you have grasped (or understood) the concept of OUT then you can appreciate the meaning of the sentence ” although Thiem’s performance in the Australian Open final was impressive he was eventually outplayed by Nadal.”

In future we’ll be looking at other prefixes that give extra sense to the meaning of a base word, but for the moment I’m off as I’ve “outstayed my welcome”.

bullish

Nobody really knows the origin of this word, however it is one that financiers love to hear as a bullish market is one which is optimistic or upbeat, one which is going up. “The market is bullish owing to the positive economic climate.”

Investors who are optimistic and believe that a stock, index or market will rise are known as bulls.

Its opposite (or antonym if you want to impress) is bearish.

You’ll probably recognise the suffix ( or bit added to the end of the word) ISH on the end of some nationalities such as English, Danish, Spanish, but did you know that it can also mean “vaguely or approximately” ? That means you can say “the company is thirtyish”, ” the colour is yellowish “, or “it’s half past two ish “.

And now I have to leave you as I’m running lateish.

In the wake of….

This expression first appeared a lot “in the wake of the financial crisis ” meaning following and possibly as a consequence of the financial crisis. A more recent context is ” in the wake of Brexit” as in “requests for Irish nationality increased in the wake of Brexit”.

Unfortunately, the most frequent current use of the expression is shown here

Italy suspends mortgage payments in the wake of coronavirus outbreak’s economic impact on families and small businesses.

Daily Mail April 1 2020

jittery

Sometimes you hear the expression that the market is “jittery” or that investors “got the jitters” which is just another way of saying that the market is nervous and so volatile. As the Financial Times said in September 2019

“the UK pound is very jittery as investors attempt to make sense of British politics.”

Japan shares end flat, down 8% for week on economic jitters

Reuters April 3, 2020

upbeat

Upbeat is currently a frequently used word to describe an optimistic economic outlook

“analysts are upbeat about the company’s future dividend payment”

“ECB tone upbeat on eurozone growth before coronavirus struck”

Financial Times February 20, 2020

The opposite is, no prizes for guessing this, downbeat which therefore means pessimistic or unenthusiastic.

“Remainers’ assessments of the UK’s prospects in the wake of Brexit are downbeat.”

AUD/USD extends recovery gains despite downbeat Australian trade numbers

FXSTREET:COM April 7 2020

Up and down can be combined with nouns to refer a direction, for example,

“the economy experienced a downturn at the end of the year” or

“short selling is forbidden in some jurisdictions if the last price movement was a downtick”.

But now I’m upping sticks, I’m off out of here.