Weekly Wrap: The Future of 401(k)s, Fund Returns, and Q3 Highlights
We recap the week on Morningstar.com and note the most popular stocks, funds, and exchange-traded funds.
|Editor's note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.|
No doubt investors are glad the third quarter is over. The stock market was volatile, rattled by a resurgence in COVID-19 cases, too-hot market valuations, and an acknowledgement that, yes, the Federal Reserve will begin to taper its asset purchase program. The market ended the quarter about where it began.
What can investors expect for the remainder of the year?
Morningstar chief U.S. market strategist Dave Sekera suggests that a pickup in the economy after a summer slowdown bodes well for value stocks. Further, while we think that inflation will moderate in 2022, we also think wide-moat stocks are the place to be if, in fact, inflation lasts a little longer. Why? Because wide-moat companies are better positioned to pass along cost increases than lower-quality companies may be.
On the sector front, our analysts expect inflation worries to dog the utilities sector. They believe oil consumption will continue to recover, though oil prices are frothy. They suspect the global chip shortage will stretch into mid-2022, which bodes well for chipmakers. And they suggest that investors will be "unpleasantly surprised" by second-half earnings from industrials.
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