1. Portfolio Adjustments:
Increased equity overweight by 1%, leaning further into U.S. growth, emerging markets, and high-conviction AI exposure.
Added national resilience beneficiaries in defense, cybersecurity, and infrastructure.
Balanced risk with convertible bonds and a modest increase in precious metals.
2. Economic Indicators
Labor market softening with unemployment and jobless claims at four-year highs and a major BLS downward revision of 911,000 jobs.
Inflation moderating toward 3.5%, supported by disinflation in services and shelter despite tariff-related pressures.
Fed expected to begin rate cuts in September, creating a more supportive environment for risk assets.
3. Strategic Focus:
U.S. earnings remain strong with broad-based growth and 82% of companies beating expectations, while international markets lag.
AI viewed as both a growth catalyst and defensive hedge, with infrastructure spending expected to exceed $500B by 2026.
Rising global defense spending underpins exposure to national security and resilience themes.