The trend is your friend, or so the saying goes. If this holds, the second half (2H) should be some pretty smooth sailing, given the 1H. And there is good news out there, albeit with some challenges. Here are our big highlights for the second half:

• Economy: Improving global economy continues for a while even as U.S. growth slows. Then likely beyond 2H, everything slows
• Inflation: Generally falls further, even with some counter trend scares. Yields likely remain stuck in a range
• Volatility: Political risk causes periods of higher volatility and uncertainty.
• Divergence: Diverging economic activity will continue to drive diverging market performance. 2H gains will be more variable, likely even some markets giving back some of the earlier gains.

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