On the equity side, we see the U.S. economy continuing to lead in the second half, which should result in the continuation of U.S. equity outperformance versus international equities. Specifically, U.S. mid- and small-cap equities have done well, and we believe they will continue to do so. Cyclically-oriented segments of the market, such as tech (XLK), energy (XLE), and consumer discretionary (XLY), should continue to outperform. One segment to underweight is emerging markets, which continues to be plagued by political concerns, a strong dollar, and tightening global monetary policy.
To see our take on equities in charts, click here.
To see our take on fixed income in charts, click here.