Wells Fargo & Co., one of America’s leading banks, has recently released a research note stating that the bear market in stocks is over.[0] The report was produced by the bank’s top analyst, Chris Harvey, who believes that the market could be entering “a different animal” and is not yet bullish.
The bear market, which saw $12 trillion wiped out in US equity values, has ended, according to Harvey’s research note.[1] He notes that the bear market often ends when we see sharp tightenings and healthy issuance, which the market has seen over the last several months.[2] This has lead to the prediction that the S&P 500 will reach 4,200 points by the end of the year – a rise of just 2.7% above Monday’s closing price.
Harvey also states that the recent pullback in the yield of investment-grade corporate bonds is “inconsistent” with the prevailing fear that the S&P 500 will renew a selloff and take out its October lows.[0] This, combined with healthy balance-sheets at the corporate and consumer level, suggests that the catalyst for an extended market downturn is largely absent.[0]
The news of the bear market’s end could be good news for the crypto market. With the stock market stabilizing, investors may be more willing to put their money into crypto as a safe haven or as a way to diversify their portfolios. Only time will tell how the crypto market will be affected by the news of the bear market’s end.
0. “Bear Market Is Over in Stocks, Wells Fargo’s Chris Harvey Says” Bloomberg, 13 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-13/wells-fargo-s-chris-harvey-says-bear-market-is-over-in-stocks
1. “Wells Fargo’s Top Analyst Predicts End of Stocks Bear Market – What Does This Mean for Cryptos?” Cryptonews, 14 Feb. 2023, https://cryptonews.com/news/wells-fargos-top-analyst-predicts-end-of-stocks-bear-market-what-does-mean-for-cryptos.htm
2. “Stock market crash is over but the bull is ‘stuck in traffic’, Wells Fargo says” Markets Insider, 14 Feb. 2023, https://markets.businessinsider.com/news/stocks/stock-market-crash-over-bull-stuck-in-traffic-wells-fargo-2023-2