by Liz Ann Sonders, Brad Sorensen, Jeffrey Kleintop, Charles Schwab and Company
Key Points
• As is often seen in investing, we believe the pendulum swung too far in the negative direction for equities late last year, but now may have swung a bit too far in the positive direction.
• U.S. economic data has deteriorated and the threat of recession, while still relatively low, has risen. The Fed is reading from that playbook, hence its more dovish tilt since it last hiked rates in December.
• Slowing economic and sales growth aren’t the only things to be watching—rising wages around the world could pressure earnings and profit margins.