Fundamentals are driving the Wall Street rally, says strategist

• The market rally is increasingly driven by fundamentals, not just monolithic tech trends.
• Rotation across sectors is the new momentum trade, requiring diversified portfolios.
• Investors should prioritize profitable, high-quality stocks and avoid non-profitable 'zombie' companies.
• Financial conditions are generally loose, and the Fed's current 'time-out mode' is deemed appropriate.

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, attributes the current Wall Street rally to a stronger alignment between equity prices and fundamentals. She advises investors to embrace sector rotation as the new momentum, emphasizing diversification and a focus on profitable, higher-quality companies while cautioning against non-profitable 'zombie' firms.