Stock Market Outlook: Scarce Opportunities, but Pockets of Value Remain
The financial services sector is the most undervalued, with banks offering particularly attractive opportunities.
The Morningstar Global Markets Index climbed 11% in the first quarter to March 25, recovering nearly all the ground lost in the fourth quarter of 2018. From a bottom-up perspective, global equities are now only slightly undervalued. The median stock across our 1,500-plus coverage now trades 4% below our fair value estimate compared with a 14% discount toward the end of 2018. Not surprisingly, we also see fewer compelling investment opportunities, with the number of 5-star stocks down by half since year-end.
Daniel Rohr does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.