Dead cat bounce
Meaning
A dead cat bounce is a temporary, insubstantial recovery from a prolonged decline, often seen in financial markets.
Origin
The morbidly vivid phrase "dead cat bounce" clawed its way into the lexicon of global finance in the 1980s, reputedly originating amongst cynical Singaporean stockbrokers. It paints a stark, unforgettable picture: even a lifeless feline, dropped from a great enough height, might briefly rebound off the ground before settling. This grim metaphor was perfectly suited to describe a market phenomenon where a security or index experiences a momentary, superficial recovery during a prolonged downturn—a fleeting upward movement that gives false hope before plunging further. It's a brutal reminder that a brief rally isn't always a true reversal, but merely the last twitch of a dying trend.
Examples
- Investors shouldn't be fooled by this small rally; it looks like nothing more than a dead cat bounce before the market continues its downward trend.
- After weeks of falling sales, the slight uptick in revenue was quickly dismissed as a dead cat bounce by company analysts.