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Commentary

Stock Market Weakness Creating Pockets of Opportunity

The market decline this past week hasn't left stocks as a whole cheap, but there are growing opportunities for stock selectors.

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Last week was a volatile one for the stock market. After some ups and downs the Morningstar US Market Index dropped over 2% on the back of middling earnings and economic growth worries. The decline in the market hasn't broadly left stocks cheap, but there are some growing pockets of opportunity. 

Concerns about the global economy came to the forefront early in the week with the release of Chinese economic data. The 7.7% gross domestic product growth rate would have been the envy of any other county, but it was short of expectations for China and a continuation of a deceleration trend. With Europe stuck in the doldrums and the U.S. muddling along, emerging-markets growth was seen as the engine of the global recovery. But if the largest emerging market begins to slow, it becomes harder to forecast what will drive the economy in the coming years. 

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Jeremy Glaser does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.