Riverfront Investment Group

Quarterly recap: Fed rate cut and Chinese stimulus take the spotlight.

Flashing green light – crowd will determine path forward.

The bond market is overextrapolating recession risk.

What history can tell us about seasonal returns.

In our view, stagflation scenarios tend to be worse for balanced portfolios than recessions.

With US payroll and unemployment data surprising to the downside two Fridays ago, Treasury markets quickly repriced the probability of impending recession, helping set off a volatility spike in stocks across the world. According to Bloomberg, economists’ consensus probability of a US recession in the next twelve months is now approximately 30%.

Since our last update of the Three Tactical Rules on June 25, 2024, equity markets have retraced most of the rally from the spring. The change in market sentiment came abruptly, due to the labor market showing signs of weakness as the number of jobs available per unemployed worker fell to 1.2 and the unemployment rate rose to 4.3%. The recent market volatility has had a dramatic impact on our tactical rules.

Join the experts at Riverfront Investment Group and VettaFi to learn more about how an active approach to fixed income could help boost a portfolio.

We expect inflation and rates to remain higher than the last decade. We favor tech within growth and cyclicals within value.

Since World War II, the US Dollar (USD) has served as the world’s preeminent ‘reserve currency’ – the means of exchange for most of the rest of the world to do business.