Riverfront Investment Group
Fixed Income Looks Attractive Again
Thus far 2026 has been a roller coaster year for fixed income markets. The 10-year Treasury, the benchmark rate for the bond market, saw its yield trade as low as 3.94% and as high as 4.43%.
2026 Outlook Summary: Riding the Wave
RiverFront’s Investment Team is proud to present the summary of our 2026 Outlook, which will be released this Friday, December 19th. In 2025, the tech-heavy US stock market rode a wave of AI awareness and spending.
There’s Still No Place Like Home
The three themes we laid out will take a few years to play out, if at all. Our portfolio positioning reflects our belief in the economic strength and momentum of the US Tech / AI trade, and we would want to see more policy clarity and earnings confirmation before we make any large shifts into international.
What Rate Cuts Mean for the Bond Market
To analyze the impact of the Fed’s rate cut on the bond market, we are going to look at the impact of Treasuries maturing between 2 and 10 years and Treasuries maturing between 10 and 30 years. We will explore the month prior to the Fed’s September meeting and the month after, in order to understand the full impact of the Fed’s decision to cut rates.
Don’t Be Scared of the ‘September Effect’
We’ve received many client questions about seasonality in stocks, and specifically about the ‘September Effect’. This is the theory that investors should sell their stocks after Labor Day to avoid autumn volatility.
Q2 Earnings Recap: U.S. Large-Cap Strong, Small-Cap Improving
From a revenue perspective, we were also encouraged by sales coming in +2.1% higher than analysts expected, with all 11 sectors showing positive revenue surprises. This also allays our fears that tariff impact might be worse than the analyst community feared.
Tactical Rules Remain in Risk-On Mode
Since the last update of our three ‘Tactical Rules’ on June 17th, both domestic and international equity markets have rallied, increasing roughly 6.9% and 3.7%, respectively.
US Trade: The Method Behind the Madness
The day of reckoning is here. Earlier in the summer, the Trump Administration set a global trade deal negotiation deadline of August 1.
Quarterly Recap Q2 2025: Business as Usual
While the market has successfully looked through concerns over tariffs, it is important to note that this is still a dynamic situation.
‘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’).
