Market Indicators
- JSE All Share (ALSI) 55,476.11
- Rand/Euro R 20.22
- Rand/Pound R 22.63
- Rand/US Dollar R 16.91
- Rand/Aus Dollar R 12.50
The K-shaped Recovery
The recovery of a stock market following a market crash is generally described using a letter of the alphabet. A V-shaped recovery refers to a short, sharp market recovery back to pre-crash levels, while a U-shaped recovery is used where markets remain subdued for a period of time before a recovery. A W-shaped recovery occurs where a V-shaped recovery is quickly followed by a second market crash, often due to a realisation that perhaps things aren’t as rosy as thought post the crash. The dreaded L-shaped recovery is where there is no recovery – markets drift sideways following the initial market fall!
In this month’s comment we look at the concept of a “K-shaped” recovery, which has gained widespread traction following the latest market recovery.
