Prof G Markets The 2025 Rally: Real Strength or Market Mirage? — ft. Kevin Gordon
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Aug 1, 2025 
Kevin Gordon, Director and Senior Investment Strategist at Charles Schwab, shares his insights on market dynamics and investment themes. He discusses how tariffs are reshaping earnings and consumer behavior, highlighting unexpected growth in some sectors. The conversation also explores the resurgence of meme stocks and the role of AI in trading strategies. Gordon delves into interest rates and inflation, providing a thought-provoking analysis of the market's future as companies navigate economic challenges and leverage technology.
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Market Rally Masks Underlying Risks
- The 2025 market rally masks underlying risks from tariffs and policy changes affecting sectors differently.
- High-margin sectors like banks and tech lead gains while manufacturing and consumer staples lag due to tariff impacts.
Goods vs. Services Market Divide
- Tariffs focus only on physical goods, creating a divide between manufacturing and service sectors.
- This arbitrary split leads services sectors, which face no tariffs, to outperform manufacturing sectors hit by tariffs.
Higher Rates Amid Inflation-Deflation Forces
- Technology like AI is deflationary whereas tariffs and restrictive labor policies are inflationary.
- Schwab sees interest rates staying higher for longer due to these counteracting factors and economic uncertainty.