Dead cat bounce - Wikipedia

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2023-03-14 18:30:10

In finance, a dead cat bounce is a small, brief recovery in the price of a declining stock.[1] Derived from the idea that "even a dead cat will bounce if it falls from a great height",[2] the phrase is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline. This may also be known as a "sucker rally".[3]

The earliest citation of the phrase in the news media dates to December 1985 when the Singaporean and Malaysian stock markets bounced back after a hard fall during the recession of that year. Journalists Chris Sherwell and Wong Sulong of the London-based Financial Times were quoted as saying the market rise was "what we call a dead cat bounce".[4] Both the Singaporean and Malaysian economies continued to fall[5][6] after the quote, although both economies recovered in the following years.

The phrase was used again the following year about falling oil prices. In the San Jose Mercury News, Raymond F. DeVoe Jr. proposed that "Beware the Dead Cat Bounce" be printed on bumper stickers and followed up with a graphic explanation.[7] This quote was referenced throughout the 1990s and became widely used in the 2000s.[8]

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