Sparked by fears that inflationary pressures might cause the Federal Reserve to tighten monetary policy at an accelerated pace, global equities suffered a modest correction in early February, only then to have the ensuing mid-month snapback briefly short-circuited by trade war jitters at month’s end. Global financial markets may continue to be volatile going forward as investors fret over a laundry list of risks including tightening global monetary policy, peaking economic momentum, rising global debt, and mounting trade tensions. However, we believe the outlook for global equities remains skewed to the upside given favorable macroeconomic conditions, stimulative fiscal policies, and improving corporate earnings. Business and investor confidence has remained elevated post the 2016 presidential election as the Trump administration continues to implement business-friendly policies. We believe that the combination of increased market volatility, lower stock correlations, and other late-cycle dynamics bodes well for the relative outperformance of both growth and active equity strategies in 2018. A continued reduction in Fed balance sheet purchases and a gradual shift in consensus for a faster pace of increases to the Fed Funds rate during 2018 also helped push interest rates higher. While Inflation remained contained during February, we believe an uptick is likely before year-end. The Fed’s balance sheet reduction removes surplus cash from the system, and we expect the resulting increase in financing costs to be passed through to consumers.