Economy shows shifting pockets of strength and weakness, says Charles Schwab strategist

• The market is in an 'era of instability' marked by volatility, rotating leadership, and uneven growth, driven by geopolitics and policy shifts.
• The economy is experiencing 'rolling recessions' (e.g., manufacturing, housing) alongside 'rolling expansions' (e.g., services), preventing systemic weakness.
• The Fed is showing internal 'instability' with wider ranges of expectations, but Sonders anticipates no rate changes at the next meeting.
• Investors should focus on 'GARP' (Growth At a Reasonable Price) with positive earnings revisions and strong balance sheets to navigate the shifting market regime.

Charles Schwab Chief Investment Strategist Liz Ann Sonders discusses the current market environment, characterizing it as an 'era of instability' rather than just uncertainty. She highlights 'rolling recessions' where some sectors contract while others expand, and advises investors to adopt a 'factor-focused' approach, favoring Growth At a Reasonable Price (GARP) with strong balance sheets.