Stocks, Bonds Climb as Oil Falls on US-Iran Hopes

• Clients are optimistic, looking for risk-on assets due to high economic growth and strong consumer/labor markets.
• Concerns include high inflation, geopolitics, equity valuations, and low market breadth (fewer stocks hitting all-time highs).
• Earnings are a key catalyst, with monetary policy (expected short tightening cycle) and trade negotiations driving short-term volatility.
• Corporate and Treasury bonds are attractive for income and diversification, with strong balance sheets, and are not expected to behave like 2022.

Omar Aguilar of Schwab Asset Management is cautiously optimistic about the market, viewing the current economic strength as an expansion of the cycle. He highlights strong economic growth, labor, and consumer markets. While acknowledging concerns like inflation, geopolitics, and market breadth, he expects earnings to be a key driver for equities and recommends corporate and Treasury bonds for income and diversification.