LIVE MARKETS-Mapping markets: what comes next after the selloff?

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MAPPING MARKETS: WHAT COMES NEXT AFTER THE SELLOFF?

Global investors were taken aback last week when it seemed that U.S. interest rate cuts might not just be on the horizon yet, but Deutsche Bank maintains that the underlying fundamentals supporting markets still remain on firm footing.

For starters the Fed has delivered 150 basis points of rate cuts since September 2024, which marks the fastest pace outside a recession since the 1980s and policymakers, though cautious of further rate cuts, have not mentioned any signs of considering rate hikes, the brokerage said.

Further, Henry Allen, macro strategist at Deutsche Bank, noted that the thawing of trade tensions between U.S. and China has placated worries that the countries' strife that has lasted for much of the year would put global economic growth at risk.

Indicators that generally reflect investor nervousness are also not raising any alarms where the Volatility Index (VIX) and high-yield credit spreads are below their October peaks, Deutsche Bank said.

Additionally, earnings in Europe and the United States have outperformed analyst expectations, according to data compiled by LSEG.

"In essence, we are not yet seeing the pre-conditions that have historically led to larger selloffs," Allen said.

But markets now face yet another test this week as data releases resume out of the U.S. and offer markets some input on the state of the economy after being in the dark for over a month. The crucial data this week will be the September jobs figures on Thursday.

(Anastasiia Kozlova)

EARLIER ON LIVE MARKETS:

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S&P 500 INDEX AND THE RESILIENCE OF ITS 50-DMA CLICK HERE

U.S. CORPORATE SENTIMENT KEEPS GETTING BETTER CLICK HERE

EUROPE'S EARNINGS POISED FOR A REBOUND – JPM CLICK HERE

BUDGET FLIP-FLOPPING IS MAKING UK MARKETS LESS ATTRACTIVE CLICK HERE

STOCKS STRUGGLE BEFORE LONG-AWAITED DATA DELUGE CLICK HERE

EUROPE BEFORE THE BELL: CAUTIOUS START, US DATA LOOMS LARGE CLICK HERE

NVIDIA EARNINGS LIKELY TO OVERSHADOW DELAYED US DATA CLICK HERE