Investors have a lot to consider: Tech stocks rebounded, financials fell last week (even after the aforementioned stress tests appeared to be pretty positive) and cash has been flocking into international stock markets.
Making sense of it all this week is the esteemed team of Liz Ann Sonders, Brad Sorensen and Jeff Kleintop, three of the top market strategists at Charles Schwab. In particular, they warn of getting suckered in by valuations in foreign markets:
We believe the pullback in both tech and the overall market was healthy and served to correct some overly optimistic sentiment conditions. But temper your enthusiasm for a sharp rebound like we've seen in the past. The new variable in the equation is a Fed that is more hawkish than the market in terms of the expected trajectory of rate hikes. This has raised concerns over a possible monetary mistake, given lower inflation. Additionally, valuations are stretched; albeit on stronger earnings growth expected for this and next year. We continue to believe that strong earnings growth, a solid economy, still-low interest rates, and ample global liquidity support current valuations; but urge investors to remain disciplined around strategic asset allocations.
In other words: Watch your back, and have a profitable week!