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U.S. equities are entering 2016 and approaching the seven-year bull market anniversary amidst market crosscurrents, however, macro and fundamental backdrops remain favorable for equities. Inflation, earnings, valuation, interest rates, and sentiment are all generally supportive of equity prices.

The easy investment returns enjoyed since the end of the financial crisis have succumbed to the pressures of elevated valuations, Federal Reserve tightening and oil price declines, which have created significant volatility, bearish sentiment and losses among investors. This changed investment environment has caused a wave of worries, with many wondering how to navigate the choppy waters of the marketplace and subdued economic growth.

Markets have had a very turbulent start to 2016, and the global economy faces a number of clear challenges. The implications of four interlinked issues—China, crude oil, credit markets, and central banks—are unsettling capital markets. The global economy faces several challenges, but it is continuing to grow, and there are reasons to maintain cautious optimism. A disciplined investment process is essential in the current environment.

During uncertain times, it is easy to get caught up in the latest headlines proclaiming a possible U.S. recession. Although many variables such as growth in hourly earnings or high yield spreads over Treasury bonds have been shown to “predict” recessions in advance, the slope of the yield curve remains a powerful indicator of what lies ahead for the U.S. economy. Using history as a guide and active monitoring of leading indicators (including what the yield curve is signaling), the analysis shows the U.S. economy will grow at a modest but uneven pace.

The economic outlook may be better than many think, with U.S. growth in 2016 likely remaining well above the long-term trend of 1.5 percent. The economy is expected to grow near 2.6 percent, with the household sector and residential investment being the two primary drivers. The recent Washington D.C. policymaker agreement, which resulted in a lifting of the debt ceiling, should add 0.2 percentage points to overall economic activity in 2016.

Last week, markets were caught on the wrong foot by the latest package of measures by the European Central Bank (ECB). There was no headline increase of monthly asset purchases, which are currently at EUR 60bn. Since then, investors have grown used to ECB President Mario Draghi over-delivering, earning him the nickname “Super Mario”. When Draghi failed to do so this time around, investors were unprepared. This overview discusses how the ECB measures are impacting international markets.

With a significant number of private equity groups (PEGs) working to succeed in this market, it has become increasingly difficult to identify targets poised for significant growth based on financial analysis alone.

The Senate Foreign Relations Committee held a hearing recently on eight proposed tax agreements: tax treaties with Chile, Hungary and Poland, and protocols amending US tax treaties with Luxembourg, Japan, Spain, Switzerland and the Convention on Mutual Administrative Assistance in Tax Matters. Treasury Deputy Assistant Secretary for International Tax Affairs Robert Stack testified at the hearing, noting it had been over five years since the full Senate had last given its advice and consent to a tax treaty, and urging Senate action.

Those who live in hurricane-prone regions know all too well that when August rolls around, along with end-of-season barbeques comes the possibility of inclement weather patterns. At this time each year, areas of the United States brace for potentially destructive storm systems. As we start the seventh year of a bull market, the calendar is signaling that the stock market may be nearing storm season. Based principally on continued global central bank easing and lower oil prices, we believe the bull will run for at least another year, if not longer.