Schwab's Liz Ann Sonders on 10-year Treasury yield: Move up has been justified by the fundamentals

• The move up in 10-year Treasury yields is justified by fundamentals (Fed policy, GDP growth, inflation expectations) and has been orderly.
• If yield movements become disorderly or disconnected from fundamentals, equities may struggle more.
• Investment strategy should focus on 'quality' stocks with positive earnings growth, stable profit margins, strong balance sheets, and high interest coverage.
• The AI story is entering a 'cascade phase,' where companies using AI to disrupt themselves (reduce costs, improve productivity, boost margins) will be key.

Liz Ann Sonders discusses the current market action, noting that the rise in 10-year Treasury yields is justified by fundamentals and has been orderly. She advises investors to focus on 'quality' stocks with strong earnings and balance sheets. Sonders also highlights the 'cascade phase' of AI, recommending companies that use AI for self-disruption and improved profitability.