Position portfolios for policy and geopolitical uncertainties, says Wells Fargo's Scott Wren

Market Trends & Trade - S&P 500 and Nasdaq hit all-time highs despite weak ADP jobs report, driven by progress on the trade front [1] - Investors are closely monitoring macro themes like trade and monetary policy [2] - A trade framework with Vietnam was announced, but the 20% tariff is higher than the 10% baseline, potentially underwhelming the market if other deals follow suit [3][9] - The consensus view is that investors are more worried about deals not happening than excited about avoiding market-tanking tariffs [9] - July 9th and August 12th are potential trigger dates for tariff-related issues, suggesting ongoing trade tensions [12][13] Portfolio Strategy & Outlook - Wells Fargo Investment Institute is focusing on quality, trimming back on consumer discretionary and industrial sectors [5] - Clients are holding cash in anticipation of a pullback or circulating it into sectors like technology [6] - The market's breadth has been poor, suggesting a potential pullback is coming relatively soon [6][7] - The institute recommends sticking with quality bonds (3-7 year intermediate part of the curve) and large-cap U S stocks (S&P 500), also U S Mid caps, while being underexposed to emerging markets and developed international markets [7] - Investors may be hesitant to hold large, long positions going into the long weekend, potentially leading to some liquidation [11][12]