OUR TAKE: We continue to prefer equities to bonds, but the magnitude of our equity confidence has moderated following 2016/1H17 double-digit equity gains. We entered 2017 with a recommended equity weighting of 66%, and we lowered our equity exposure to 62% in July (Cash has gone up to 6% from 2%). We expect modest equity performance in 2H17/2018 as sentiment is challenged by fading global PMI momentum, tougher year-over-year earnings comparisons, and broadening policy normalization. Our EM/Europe OW recommendation remains unchanged, and we expect Canada/TSX to catch up with the S&P 500 in the latter part of 2017. LatAm usually outperforms in periods of Fed tightening, and LatAm has been leading since the first Fed rate hike in December 2015. In our opinion, LatAm will maintain its edge until the end of the cycle. Stay OW.