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Quarter-End Insights

Stock Market Outlook: Time to Play Defense

In a market leaning toward the overvalued side, investors must dig deeper to unearth buying opportunities.

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  • Markets have largely recovered from January's correction, and the average valuation of our coverage universe continues to tick up, standing at 104% of fair value going into the second quarter (all market and geographic averages are on a market-capitalization-weighted basis). 
  • In a market leaning toward the overvalued side, investors must dig deeper to unearth buying opportunities. However, macro instability has created some buying opportunities, especially in a number of energy and high-quality consumer staples stocks.
  • On a global scale, firms that our analysts cover in Asia Pacific now look to be the most undervalued, reversing the region's most overvalued position at this time last year. Conversely, North America and Europe look to be the most overvalued.

 

Lauren Adams does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.