1. Portfolio Adjustments:
Equity overweight was reduced from 3% to 1%, reflecting a more cautious approach amid rising volatility and trade uncertainty.
U.S. exposure was trimmed in favor of high-conviction mega-cap and AI names, with increased use of active strategies.
Diversification was enhanced through short-term inflation-protected securities and international bonds with slightly extended duration.
2. Economic Indicators:
Markets experienced extreme swings, including a 14% S&P drop followed by a 9.5% rally after a temporary tariff pause.
Inflation spiked short term due to front-loaded demand, but longer-term disinflation trends remain intact.
Labor softness and higher underemployment suggest the Fed may resume rate cuts to support growth.
3. Strategic Focus:
U.S.–China trade tensions remain a key driver; emerging market exposure was moved to neutral, including a tactical reduction in China underweight.
AI and mega-cap tech are core themes, supported by significant investment and projected earnings strength.
Portfolios are more globally balanced—73% U.S. / 27% international equity—and active risk has been reduced to manage near-term uncertainty.