We would be trimming here, says Wells Fargo's Paul Christopher

Market Outlook & Inflation Expectations - The market is pricing in the possibility of a 4-3 majority within the Fed leading to lower rates and a potential return of inflation [5][6] - Longer-dated inflation expectations are ticking up, with the 5-year inflation swap reaching its high for the year, indicating concerns about potential decisive action from the Fed [3][4] - The market is not making significant progress, experiencing chop due to a back-and-forth between soft economic data and positive earnings reports from top 10 stocks [9] Investment Strategy & Portfolio Positioning - The firm suggests investors should prepare for potentially weaker economic and stock market numbers in the coming weeks, indicating a near-term top for equities [10] - A pullback of 5% to 10% is possible, leading the firm to recommend trimming positions [10] - The firm maintains an overweight position in large-cap stocks and believes in the tech and AI stories, but suggests reducing some holdings in these areas [11] - The firm downgraded communication services to neutral due to concentration, with two constituents accounting for roughly 70% of the sector's market cap [11][12] - The firm favors recycling proceeds into fixed income, specifically 3 to 7-year maturities, as a parking place for the next few weeks [12] Market Concentration - The top 10 stocks account for 40% of the S&P 500's market cap, highlighting a concentration risk [8]