How can we possibly be in a bull market right now? Two letters: AI | CNN Business

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Why are there bulls running around in a bear economy? It comes down to just two letters: AI.

The bear market is over. But the bear economy isn’t. The eurozone has sunk into recession and some economists fear the United States is next. We’re worrying about rate hikes, inflation, lower spending, layoffs, surging mortgage costs and a war in Europe. That’s a strange place to find a bull market. “You tend to see bull markets coincide with economic expansions, not economic contractions,” said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute.

A narrow market The S&P 500 rallied Thursday to end the day in a bull market, marking a 20% surge since its most recent low, reached on October 12, 2022. That brought an end to the bear market that began in January 2022, since a 20% lift from recent lows is generally accepted as the definition of the start of a bull market. However, there is no exact definition — and the current market situation is a bit more nuanced than the typical bull market-bear market binary.

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