Schwab Network 'Wait And See' Narrative Facing Investors
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May 9, 2025 Adam Coons, Co-chief investment officer at Winthrop Capital Management, dives into the effects of ongoing tariff negotiations. He emphasizes a 'wait and see' approach as volatility looms over the market. Rather than viewing tariffs through a U.S. lens, he suggests focusing on their impact on China. Coons also shares a bullish perspective on bonds amid market fluctuations, advocating for a balanced portfolio and caution in tech investments, particularly in companies with unstable revenue.
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Market Exhaustion On Tariffs
- The market shows exhaustion over the ongoing tariff narrative without major changes expected soon.
- Investors are adopting a "wait and see" mode as no immediate Fed actions or tariff concessions appear forthcoming.
Tariffs Hurt China More
- Tariffs impact China significantly, with ports either empty or overflowing, indicating China has much to lose.
- The U.S. may have a tough time using a heavy-handed negotiation approach this round with China.
Bullish on Bonds
- Bonds offer an asymmetric risk-reward profile with over 5% yields if interest rates stay stable.
- Rate declines would boost bond prices; only significant rate hikes pose downside risk, which is unlikely.