The S&P 500 index is down nearly 9% from its early September peak. Likewise, the Dow Jones Industrials and the Nasdaq Composite indices are down roughly 8% and 10% from their highs, respectively. In our view, the recent pullback in US equities has been rational and consistent with the government’s ongoing stalemate over Phase 4 fiscal stimulus negotiations. The pace of the economic recovery is slowing, and we anticipate the near-term data may soften in the absence of additional stimulus. While we have a high degree of confidence that another round of fiscal stimulus will ultimately be passed, the timeline has been pushed out and the chances of getting something done before the November election have dimmed. Nevertheless, we believe both political parties are motivated to pass additional stimulus and the variables will be the size and timing of a deal. We expect something to come to fruition before year-end.