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.

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.

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.

The Nikkei 225—Japan’s version of the S&P 500—is near an all-time high. Yet we think Japan is still a good source of opportunities.

Hot on the heels of the S&P 500’s strong earnings season, recent inflation data is giving investors another reason to be cheerful: consumer prices rose just 2.7% annually in July, below expectations. This lighter-than-expected print—despite tariff-related pressures in some categories—has led traders to ramp up bets that the Federal Reserve will begin cutting interest rates in September. But a lighter CPI has important implications for the equity market, too.

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...