This week’s highlights:
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The outlook may be getting gloomier, but the selloff that sent stocks into correction territory took a pause this past week with the market gaining roughly 0.6%. Part of it may be that in some areas of the stock market, investors see opportunities. Case in point, our weekly screen of newly undervalued stocks turned up a whopping 48 names, including Oracle and Disney.
Amid this uncertainty, investors have been flocking to healthcare stocks. Can that rally continue? We spoke with Karen Andersen, Morningstar’s director of healthcare equity research, about this space, including the outlook for GLP-1 drugs and what it means for investors.
Meanwhile, Sarah Hansen explores whether the overall market is looking cheap. The answer: Yes, but not by much.
This week also saw the monthly Federal Reserve meeting. Officials left interest rates unchanged but signaled that they still expect to cut twice this year. Some commentators suggested there was a bounce in stocks following the meeting because some rate cuts were still on the table, but that takeaway is a bit surprising. Chair Jerome Powell’s overarching message was that amid President Trump’s trade wars, the outlook is extremely uncertain. Morningstar senior economist Preston Caldwell writes that the Fed’s next move is “anyone’s guess.”
Also this week, check out our story about David Giroux, the top-performing manager of the T. Rowe Price Capital Appreciation Fund. He’s been beating the market for years, thanks to a rigorous screen for contrarian stocks. Gabe Alpert checked in with Giroux about what he thinks about the market, some of his favorite stocks, and why he’s favoring bonds.
Lastly, we’ve got a timely update for our list of the top defensive stocks. These names offer reliable earnings (and often dividends) when markets look uncertain. The list includes a household name food company and one of the world’s biggest brewers.
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.