It seems that the news cycle has been as important as fundamentals in pricing financial assets. But, there comes a time when valuations get stretched too far and even though there has not been an improvement in the news flow/fundamentals, markets can rally. July was such a month. Risky assets rallied and risk free assets sold off. However, eventually prices cannot keep going up unless fundamentals improve and/or risks decline. August is looking like a critical juncture for both trade talks and the Italian budget. In other words, volatility may return. Our current strategy is to remain somewhat cautious, do not chase higher prices (lower yields) and wait for prices to reach attractive levels. We believe both economic and technical pressures point to higher U.S. Treasury yields, though we remain of the belief 10-year maturities will struggle to sustain yields much over 3% unless the rest of the global economy improves.