In the middle of mixed signals about the performance of the US economy and anxiety about the next central bank decision to control inflation, last week, stocks rose to put an end to the bear market. The fall started with the record set on January 3, 2022 and lasted until October 12, 2022, when the market hit bottom after falling over 25 percent.
Last Thursday, the S&P 500 index increased 0.6 percent, rising 20 percent above the last October bottom, enough to signal the start of a new bull market. In all, the bear market was short, it lasted almost nine months with relatively shallow losses, but it was the longest since the 1940s.
For several reasons, some Wall Street analysts cannot agree if the new bull market can last. For instance, there is no agreement if this week’s central bank meeting will decide to pause or to continue increasing interest rates. There is also concern because the market gains are concentrated among a few high-tech companies, such as Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft, together with Netflix and Tesla. Additionally, these companies have been joined by the newcomer Nvidia, originally a producer of computer chips for video game graphics. The announcement by Nvidia, last week, of a new artificial intelligence chip pushed its market valuation over $1 trillion.
