Riverfront Investment Group
‘King Dollar’ Challenged…But Not Vanquished: Still No Substitute for the World’s Reserve Currency
While both valuation and technical factors suggest to us that the dollar may continue to weaken in the near-term, we would caution investors against reading too much concerning the US’ long-term economic stability into further dollar weakness.
Deficit Pressures Treasuries… But No Crisis: US Treasury Market Is ‘Too Big to Fail’
The first half of 2025 has been driven by headlines that have caused volatility in both the stock and bond markets. While tariff negotiations have commanded the most attention, we are now pivoting to the federal budget deficit, which feels like a perpetual headline over the last 15 years.
Why the Recession Call Matters for Stocks
This past week, news flow around policy came in hot and heavy, with President Trump’s ‘Big, Beautiful’ tax cut bill passing the House of Representatives, and Trump threatening 50% tariffs on the European Union (EU).
Inflation Continues to Cool
The April Consumer Price Index (‘CPI’) report was released last Wednesday and gave the Federal Reserve another positive data point in its inflation fight, as did Thursday’s negative Producer Price Index (‘PPI’).
Tactical Rules Move to Neutral
Currently, the Three Tactical Rules are a “flashing yellow light” - a roughly neutral rating which represents a slight downgrade.
‘Stagflation Frustration’ in the Age of Tariffs
The tariff chaos continues … but the economy remains intact. For now.
Bond Market Not Signaling Recession
The stock market sell-off appears to be signaling a recession. However, we believe the bond market disagrees.
Tactical Rules Turn More Bullish
Since our last update of our ‘Three Tactical Rules’ on February 4, equity markets have been under pressure as the S&P 500 has retraced more than 23% of the rally that started October 2023.
Data Determination vs. Headline ‘Hell’: Making Sense of the US Market’s Crosscurrents
Recent US stock weakness may be related to a downturn in US economic data and headline shocks related to tariffs.
Q4 Earnings Recap: US Large-Cap Earnings Justify Their Current Valuation
We view quarterly earnings season as a critical checkup on how markets are handling current challenges.
American 'Economic Exceptionalism' Isn't Dead: How the US Is 'Built Different'
The U.S. economy remains structurally productive. American Economic Exceptionalism is powered by innovation and labor flexibility.
Of Stocks and Bonds
Long maturity treasuries can provide downside protection to offset equity risk, in our view.
