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39 Charts That Track Market Data for Financial Advisors

Monitor the equities, fixed-income, and funds markets.


Keep up with constantly changing markets with the latest from Morningstar analysts and researchers. The charts below reveal the financial market shifts that advisors need to monitor in early 2024.

To see all 39 charts, download the full markets observer.

Equities Market

U.S. equity sector performance

The fourth quarter of 2023 was a risk-on environment across the U.S. stock market, with cyclical and economically sensitive stocks significantly outperforming defensive issues. Only energy declined in the fourth quarter, as weaker energy prices weighed on these shares.

For the one-year period, technology, communication services, and consumer services stocks vastly outperformed the broad index. Only two sectors—utilities and energy—showed negative returns for the one-year period.

Chart showing trailing quarter and trailing one-year return percentages across equity sectors.

Cyclical and sensitive stocks outperformed their defensive counterparts in the fourth quarter of 2023.

U.S. small-cap stocks look inexpensive

Looking at the dynamic of valuations between small- and large-cap U.S. equities, we’ve noted a growing “gap” between smaller companies and their larger brethren.

Below, our analysis of historical price-to-earnings ratios of small caps relative to large caps at the asset-class level suggests that today’s valuations are close to multidecade lows. Stock-by-stock reviews by Morningstar Equity Research also suggest that smaller-caps are trading cheaper than their larger-cap peers.

Our analysis suggests that small-cap stocks may be undervalued, compared to large-cap U.S. equities.

Our analysis suggests that small-cap stocks may be undervalued, compared to large-cap U.S. equities.

Fixed-Income Market

Credit spreads tighten in 2023

While credit spreads trended lower in 2023, spreads in the risker segments of the credit market remained above 2021 lows. A resilient economy has provided a tailwind for corporate bonds but concerns over weakening fundamentals persist.

Continued uncertainty surrounding a potential recession, sticky inflation, and a weakened consumer could cause credit market volatility.

Chart showing the option-adjusted spreads of investment-grade and high-yield corporate bonds.

Credit spreads of corporate bonds over the trailing three years. Widening credit spreads indicate that lower-quality securities are becoming riskier compared to higher-quality bonds.

Municipal bonds and tax-free income

The tax-free income received from munis sets these bonds apart from taxable bonds such as U.S. Treasuries and corporate bonds. Tax-equivalent yield is a helpful tool for investors to fairly compare the yields of taxable and tax-exempt bonds, factoring in the taxes they would owe on the interest earned from income.

Chart comparing the yields of corporate, U.S. Treasury, and municipal bonds with the tax-equivalent yields of munis.

Ten-year trailing yields of different types of bonds.

Economic Indicators

Slowing GDP growth

We expect U.S. GDP growth to slow in 2024, owing to delayed effects of monetary tightening along with the depletion of household excess savings. Alleviating supply constraints and cooling demand are pushing inflation down, and we expect it to come in line with the Fed’s 2% target in 2024. This would allow the Fed to begin cutting rates aggressively, triggering a GDP growth rebound in 2025 and the following years.

Chart showing U.S. real GDP growth percentages and projections for 2024–27.

We predict U.S. GDP growth will trough in 2024 before recovering.

U.S. interest-rate projections

Our forecast for the path of the federal-funds rate is well below market expectations, growing into a nearly 2% gap by the end of 2025. Our optimism on inflation is a key reason why we expect interest rates to fall faster than the market.

Also, we disagree with the emerging view that the neutral rate of interest has jumped compared with its pre-pandemic level. We expect the 10-year Treasury yield to reach 2.75% by 2025, down from 4.1% as of January 2024.

Chart showing Morningstar’s forecast for federal-funds rates, 2024-26.

We project U.S. interest rates to fall lower than the market expects.

Investment Data for Advisors and Wealth Managers

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