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Quarter-End Insights

Morningstar's Take on the Third Quarter

Our analysis of the third quarter in stocks and funds.

As the third quarter of 2020 comes to a close, Morningstar's analysts have provided in-depth reviews and outlooks across equity sectors and fund categories. 

Equities

33 Undervalued Stocks for the Fourth Quarter
Here are our analysts' top ideas in each sector.

Economic Outlooks: We Don't Think the Market's Too Optimistic
We forecast a strong long-run U.S. recovery.

Quarterly Markets Summary: 7 Charts on Q3 Stock and Bond Markets
We share some highlights from this quarter.

Stock Market Outlook: Finding Opportunity Beyond Mega-Caps
Although the market's largest names are pricey, we see several pockets of value.

Healthcare: Drugmakers, Managed-Care Firms Undervalued
We expect a coronavirus vaccine to be released within the next six months.

Utilities: Some High-Quality Utilities Available at Reasonable Prices
Sector fundamentals remain strong and dividends keep growing.

Basic Materials: Opportunities in Basic Materials Limited to Agriculture and Chemicals
Lithium demand took a hit as a result of the pandemic, but we expect it to rebound.

Communication Services: Facebook Powering the Communications Sector
Traditional media stocks still look the most attractive.

Energy: Energy Stocks Historically Cheap
We expect demand to catch up in 2021 and 2022.

Consumer Defensive: Consumer Defensive Sector Looks Fully Valued
Alcohol and tobacco stocks are trading at the greatest discounts to our fair value estimates.

Technology: We'd Welcome a Pullback in Overvalued Tech
We're still fond of software and cybersecurity firms.

Financial Services: Banks Still Look Cheap
Some high-quality financial services firms are trading at decent discounts.

Industrials: Where to Find Attractive Stocks in Industrials Sector
The aerospace, defense, and industrial distribution industries look undervalued.

Real Estate: Lots of Opportunities in Yield-Rich Real Estate Sector
A fourth of the real estate sector trades in 5-star territory.

Consumer Cyclical: Travel and Leisure Companies Ready as Americans Venture Out Again
We expect car and local travel to rebound before international and air travel.

More Gains for International-Equity Funds in the Third Quarter 
Strong growth in Asia, especially China, drives stellar emerging-markets returns.

Tap Into This Cheap Beverage Maker
In the somewhat frothy consumer defensive sector, alcoholic beverage producers look cheap.

Coronavirus Zapped Energy Stocks
When will crude oil recover?

Healthcare Sector Adjusts to Pandemic's Pressures
And four companies we like right now.

Where to Find Bargains Today? Look to Small- and Mid-Caps, Value Stocks
Several mega-cap stocks significantly overvalued.

Tech Bridged Gaps Created by Coronavirus
And what we expect from October.

Funds

U.S. Equity Funds Press Higher but Fade Late in the Third Quarter
Investors pile into what's working.

Fixed-Income Sectors Rise in the Third Quarter
Fed policy shift sets the stage for years to come.

Download the quarter-end data.


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