Schwab's Liz Ann Sonders: Stocks that have been working will continue to work

Market Trends & Factors - Growth-oriented factors, including historical and prospective growth, are leading the market, indicating a quality bias with emphasis on sustained earnings growth [3] - Momentum as a factor has picked up, meaning stocks that have been performing well continue to do so [2] - Better or worse news often matters more than good or bad, relative to expectations, direction of travel, and inflection points [5] Geopolitics & Policy Impact - The market's reaction to events like tariff announcements and Middle East conflicts is driven by whether the outcome is better than the worst-case scenario [6][7] - The setup of the market, in terms of positioning, is crucial in determining the potential upside or downside from policy announcements and geopolitical events [8] - Currently, there's an average effective tariff rate of 15% in place [6] Investor Behavior & Positioning - Retail traders, particularly those who emerged during the COVID-19 era, exhibit a "buy the dip" mentality, influencing market movements in areas like retail favorites and meme stocks [10] - Institutional investors are not yet fully participating, suggesting potential for further upside if they increase their risk-on positioning [9][11] - The "pain trade" is still higher, indicating that the market may continue to rise due to institutional under-positioning [8][11] - Rampant enthusiasm from retail traders could make the market vulnerable to downside risk if a negative catalyst emerges [12]