Flying felines: The uncertainty of today's markets

Is sectoral diversification a 'dead cat bounce'?

There is a saying in financial markets about the 'dead cat bounce': if you drop something, anything, from a sufficient height, it will bounce. It will be dead, but it will bounce.

In April, equity markets bounced from the lows they experienced in mid-March. Only time will tell if this a dead cat bounce, but the height of the fall and speed of the recovery does suggest it may have certain deceased feline qualities about it. Having fallen by 34% from its peak, the MSCI world index is now 28% higher than the lows seen in mid-March, taking it to a level last seen at the end of May 2019.  Effectively, this is saying that a global pandemic and the shutting down of a large proportion of the global economy has resulted in investors losing one year of global equity r...