Schwab Network Tariff Deal Rally Will be Short-Lived, Global Impact in Question
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May 6, 2025 Nathan Peterson, Director of Derivatives Analysis at Schwab Center for Financial Research, shares his insights on recent market trends. He argues that any rally stemming from trade deals will likely be short-lived due to ongoing global uncertainties. The discussion also touches on the impact of tariff negotiations with China, skepticism surrounding their progress, and the complexities of current economic indicators. Peterson sheds light on how these factors interplay with Federal Reserve expectations and investor psychology.
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Short-Lived Trade Deal Rally
- Investors are currently buying stocks in anticipation of trade deal announcements to avoid missing out on potential gains.
- However, these rallies may be short-lived as uncertainty about global economic impacts persists.
Inflation Concerns Affect Market
- Warning signs like corporate earnings guidance and inflation metrics could limit market optimism.
- Hotter inflation data in the coming weeks would likely be unfavorable for markets.
Buy the Rumor, Sell the News
- The market could experience a buy-the-rumor, sell-the-news reaction when trade tariffs or deals are announced.
- There is a bearish lean after the news due to lingering uncertainty and technical resistance levels.