Resilient U.S. economic growth, better-than-expected calendar 2Q19 corporate earnings, a federal budget compromise, and easing global monetary policy helped sustain upward momentum in U.S. stocks in July. Dividend paying stocks and beneficiaries of lower interest rates generally outperformed the overall equity market for the month as global bond yields continued to decline. More recently, however, investors have been rattled by the lack of consensus among the Federal Open Market Committee on the need for interest rate cuts as well as a U.S.-China trade truce that proved short-lived, with President Trump threatening to impose a 10 percent tariff on an additional $300 billion in Chinese imports beginning September 1. Short-term U.S. Treasury yields increased modestly during July, while longer-term Treasury yields were generally unchanged. Second quarter 2019 real GDP surprised to the upside, growing at a seasonally-adjusted annualized rate of +2.1 percent quarter over quarter versus the consensus estimate of +1.8 percent. Despite mounting headwinds, the U.S. economy currently remains in solid shape and there are reasons to believe the expansion has more room to run based on enduring benefits from tax cuts and deregulation, rising productivity, accelerating wage growth, solid job growth, recovering retail sales growth, easing financial conditions, and growing global stimulus. Nonetheless, prudent risk management is crucial in the current volatile economic and geopolitical environment. The U.S.-China trade conflict remains a key binary risk going forward, but so does the upcoming October 31 deadline for the UK to negotiate a withdrawal agreement or risk immediately crashing out of the European Union. Given the snapback in U.S. equity valuations – all the year-to-date market gains have been driven by multiple expansion – and accumulating global macro uncertainties, we continue to incrementally shift portfolio composition toward high-quality growth stocks with visible earnings progression and secular underpinnings, but also continue to opportunistically add to pro-cyclical growth stocks with compelling risk-reward profiles.