Schwab Network Tariff Ruling Sparks 'Summer Power Rally,' AVGO & AMZN Growth Potential
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May 29, 2025 In this engaging discussion, Jay Hatfield, CEO and CIO of Infrastructure Capital Advisors, shares insights on the recent tariff ruling and its surprisingly positive market impact. He believes this decision could spark a significant 'summer power rally.' Hatfield highlights the underappreciated growth potential of stocks like Broadcom and Amazon, citing their reasonable valuations. Additionally, he projects the S&P 500 could hit 6,600 by year-end, emphasizing strong earnings and evolving market dynamics.
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Tariff Impact and Market Rally
- The impact of tariffs was overestimated as they affected only about 10-15% of the economy, equating to about 0.5% of GDP.
- The court ruling on tariffs sparked a significant market rally, contributing about two-thirds of the recent uptick.
Summer Power Rally Outlook
- The market tends to experience a summer power rally, with a year-end S&P target of 6,600 points.
- Despite seasonal risks and possible short-term pullbacks, long-term confidence remains due to strong earnings forecasts.
Sector Leadership and Small Caps
- Tech and industrials will lead the market, while current strong sectors may lag.
- Small caps are expected to outperform once market risk declines and the Fed starts cutting rates.