U.S. equities rose and bonds fell as the Fed cut rates.

After years of underperformance relative to U.S. markets, international equities are staging a strong comeback in 2025. 

A strong finish to 2Q25 earnings and higher odds of a rate cut pushed markets higher this week.

Estimating our current position in the business cycle is highly useful for asset allocation, as specific asset classes tend to perform differently depending on which stage of the cycle the economy is currently in. In situations like now when economic data can be conflicting, it’s helpful to look at the high yield spread as a proxy. Here’s what it says about the cycle, and what it could mean for your portfolio.

U.S. equities, led by small caps, rose and bond yield fell across the curve this week.

As summer 2025 winds down, the global economy continues to hum along despite the pessimistic narratives around stagflation, recessions, and trade wars. Notably, the U.S. economy remains resilient, showing signs of strength and stability. Growth has moderated from its post-pandemic highs, but recent data suggest a controlled normalization rather than a downturn.

U.S. equities fell and U.S. investment grade bonds rose as economic data came in mostly as expected.

At Jackson Hole last week, Fed Chair Jerome Powell hinted the Fed could cut rates in September, but emphasized decisions will remain data-dependent and insulated from political pressure. Let’s look at what that might mean for your portfolio.

U.S. equities and bonds were mostly higher as the market expects a September rate cut.

Despite the numerous headlines around potential stagflation and recession, the U.S. economy continues to show signs of strength and stability. While growth has cooled from its post-pandemic highs, the data points to a controlled normalization. Here’s what’s happening, and what it means for your portfolio...