When we reduced our recommended allocation to US equities in mid- November, we did not envision the 9% drop in the S&P 500 or the 7% decline in the MSCI All Country World that occurred during December. Equity markets were led down by two of the key market challenges that we cited in November: US-China trade tensions and monetary policy. However, financial markets and their psychological impact on the real economy may encourage US and Chinese leaders to expedite a trade deal and could focus central banks on macro challenges that they have not yet considered. We will be watching for any signs of movement on these two critical influences.