Despite yesterday's dramatic - but relatively contained - selloff, Deutsche Bank's Macro Strategist, Henry Allen, notes that it's worth remembering that risk assets look in a relatively strong position right now, all things considered.
Only last week, the S&P 500 and Europe’s STOXX 600 hit all-time highs, US credit spreads were around their tightest levels since the GFC, and Europe’s were at their tightest in 3 years as well. Moreover, the S&P 500 hasn’t seen a 10% correction since October 2023.
But as the last 24 hours have demonstrated, markets remain very sensitive to downside news.
