Markets around the world have been rattled in recent days on concerns over the US economy, the so-called yen carry trade and geopolitical worries, among other things. Major selloffs in equity markets - driven by a weak US employment report and worries the Fed may have fallen behind the curve - stabilized this week, but investors haven't yet shown conviction that the worst of the damage is behind us. Reversing recent trends, bad economic news became bad news, at least for the moment.
Despite the sharp selloff seen in risk assets in the past couple of weeks, the broader macro environment and corporate outlook still remain supportive, so risk assets have the potential to stabilize and perform well over the rest of the year. Thursday's weekly jobless claims report came in below forecasts, easing some of the recent concerns about the strength of the labor market. The Labor Department said first-time filings for jobless benefits fell by 17,000 to 233,000 last week, below economists' expectations. In its latest Market Views piece, PGIM Quantitative Solutions asks whether this summer selloff is too much, too soon.
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