Want to stay informed with market insights and investing ideas from Morningstar? Sign up for my weekly Smart Investor newsletter here.
This week’s highlights:
Stocks may have mostly stabilized after two weeks of wild trading, but it would be a mistake to assume all is quiet on Wall Street. The Morningstar US Market Index lost 1.27% over the past week. As we highlight in our Weekly Market Update, there were winners in energy stocks, as oil prices rose, and real estate stocks, which appear to have benefited as bond yields eased back from recent highs. But reflecting the changed mood among investors, tech stocks sank.
Value fund manager Steve Romick, who leads the top-performing FPA Crescent fund, spoke with Leslie Norton about the recent volatility and the outlook. He says he’s not ready to “lean in hard” and start adding to his weighting in stocks.
Stocks’ small weekly gain came as the waves from President Donald Trump’s trade wars are beginning to be felt. Market heavyweight Nvidia revealed it would take a $5 billion hit, sending its stock down some 10% and leading Morningstar analyst Brian Colello to lower his fair value estimate. It was a similar story for chipmaker AMD.
We’re also starting to see the impact on monetary policy. The European Central Bank cut rates this week, saying that the “outlook for growth has deteriorated.” Meanwhile, the Bank of Canada opted to hold rates steady, citing “pervasive uncertainty” in the outlook thanks to Trump’s tariffs. Meanwhile, our colleagues at DBRS look at where the global fallout from tariffs will hit hardest.
In the bond market, we saw some easing back of the big jump in yields that unnerved many observers. Sara Silano spoke to bond fund managers in Europe about their view of US Treasury bonds, and whether Trump’s policies now require an extra yield premium to invest in these assets.
Elsewhere, Valerio Baselli checks in on how bitcoin has been trading a lot like technology stocks.
As we’ve noted, the stock market’s decline and recent volatility has sent a hefty number of stocks into undervalued territory. This past week, for example, saw 24 new 4-star stocks. Some stocks have seen unusually wide changes in valuation. Bella Albrecht found a dozen stocks that had been fairly valued or overvalued at the start of the year and are now in 5-star territory, meaning they’re now deemed significantly undervalued by Morningstar analysts.
For a broad sweep of our coverage of the tariff impact on the markets and your portfolio, check out our landing page here.
As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our weekly calendar of key upcoming data and events.
link
