For the last year, the two headed monster of Fed policy and Chinese trade tensions have captivated the markets. As we look ahead to the remainder of the year, where's the opportunity?

Here's our quick perspective now that the Fed cut rates by a quarter point.

The U.S. is officially in its longest expansion on record, breaking the previous record of 120 months that ended in March 2001. While it is the longest, it is also one of the weakest.

2019 has given (almost) all investors a reason to smile – but can it continue?

Solid US economic data and recent positive China Purchasing Managers Index keep us optimistic US Equities will trend higher, albeit at lower annualized returns than the past decade. Within equity sectors, we are most bullish on technology and healthcare. We believe communication services, financials, and REITs are the least attractive sectors.

Earnings growth slows dramatically, margin pressures build, tighter monetary policy and sector and stock selection will continue to focus on industries and companies that should perform well late in this cycle.

In a quarter where a “risk-on” mentality generally prevailed, the third quarter saw U.S. stocks gain, Treasury yields rise, and credit spreads tighten. For their part, U.S. Treasury investors looked past threats of tariffs and trade wars to an economy that is still strong by all accounts.

As we move into the final quarter of 2018, the landscape is dotted with both opportunities and challenges, created by a combination of Federal Reserve policy, the Trump Administration, and frankly, time.

As we entered the second half of 2018, markets appeared to be hitting an inflection point. On one hand, economic data remained robust, with the consumer fully engaged, wages growing at a modest pace, industrial production steady, and the corporate tax cut creating the opportunity for meaningful investment.

By using a disciplined business cycle approach, investors can identify key phases in the economy to achieve active returns from sector allocation.