Mayfield: Pushing the tariff deadline is leading traders to believe there's room to negotiate

Market Impact of Tariffs - Markets do not fully believe tariffs will be implemented on August 1st, otherwise markets would be significantly lower [1] - Pushing the tariff deadline suggests room for negotiation, but the 10% baseline tariff remains a floor [2] - The threat of tariffs has led some investors to seek opportunities in Europe [3] - Tariffs have weakened the dollar, benefiting international stocks for US investors [5] - US tariffs may catalyze fiscal impulse in Europe, China, and Japan, potentially boosting international diversification in the long term [6] Market Momentum and Strategy - Momentum begets momentum; new all-time highs can lead to further gains [7] - Investors should lean into the market momentum rather than taking profits despite trade anxieties and stretched valuations [8] - The spread thrust off the lows is a bullish indicator [8] Financial Sector Preference - The speaker favors big banks (KBE) over regional banks (KRE) due to regulatory tailwinds and M&A/IPO activity [9][10] - Big banks are expected to overcome sentiment hurdles during the upcoming earnings season [11] - Banks are preferred over insurance due to their cyclical nature and potential for higher profits and growth [12][13] Cyclical Sectors and Investment Strategy - The speaker favors cyclical sectors but prefers high-quality, large-cap companies [14] - While industrials and small caps are cyclical, there's hesitation on small caps due to rate headwinds and idiosyncratic challenges [14]