Massive market sell-off: Justified or an overreaction?

The broad market sell-off is still evolving, but it’s a good moment to review the catalysts, the technicals at play, the fundamental picture, and what, if anything, allocators could consider doing. As of this writing, over the past three days, the Nikkei was down 20%, the yen was up 4.5%, the S&P 500 was down 4%, high-yield spreads were wider by around 50 bps, and the US 5-year Treasury yield was down around 35 bps. Bottom line: I think markets have overreacted relative to the fundamental backdrop.