Morningstar's Take on the Second Quarter

Morningstar's analysts have provided in-depth reviews and outlooks across equity sectors and fund categories for the second quarter of 2021.

Portfolios

A Midyear Portfolio Checkup in 7 Easy Steps Reviewing your year's performance so far, and positioning yourself for the future.

Hot Spots for Your Midyear Portfolio Checkup Here's what to keep an eye out for this year.

Equities

Market Outlook: Stocks Looks Fairly Valued It's a good time to trade up to wide-moat companies.

Economic Outlook: Recovery Moving Quickly Thanks to Soaring Consumer Demand We've increased our GDP forecast.

Q2 2021 Market Performance in 7 Charts Bond markets recover and stocks post broad gains.

Q2 2021 Style Box Update: Value Rally Runs Out of Steam A look at revival of large growth stocks, and the ebb of small value.

Q2 Top Stock Performers on Morningstar's Coverage List Energy and tech stocks lead as the U.S. market rally continued.

Basic Materials Stocks Look Pricey Although outperformance has leveled off, there are currently no 5-star stocks from the sector on our coverage list.

Facebook, Alphabet Still Have Upside Potential After Strong First Half Surging advertising demand drives online media shares higher as traditional media firms scramble to bulk up.

Few Opportunities in Consumer Cyclical Sector We see pockets of opportunity in powersports companies that have benefited from people's desire for outdoor activities while social distancing.

Cost Inflation Weighs on Consumer Defensive Sector Tobacco still looks undervalued.

Even After Rally, Some Bargains Remain in Energy Sector Services and integrated firms trading at discounts to fair value.

Higher Inflation Could Benefit Financial-Services Companies After recent runup in prices, the sector is about 10% overvalued.

Drugmakers, Biotech Pressured by Policy Risk, but We Don't Expect Big Regulatory Changes We also expect a return to more elective procedures.

Infrastructure Plan Slowly Coming Together, but Industrials Already Pricing It In We think business travelers will fly again in late 2021.

Hard-Hit Real Estate Subsectors Picking Up Steam With vaccine rollout, shoppers are back in the stores and travelers are returning to hotels.

Strong Tailwinds for Tech in Cloud, 5G, and 'Internet of Things' Large-cap software has some margin of safety.

Utilities Face Inflation, Interest-Rate Fears But there is a bright side: clean energy and clean balance sheets. 3 Dividend Stocks for 2021 It pays to be choosy when it comes to dividend paying stocks. 33 Undervalued Stocks for the Third Quarter Here are our analysts' top ideas in each sector for the coming quarter.

Funds

Growth, Large-Cap Funds Lead in Second Quarter Thriving energy stocks helped some value funds outperform. The Second Quarter in International Stock Funds Growth led the markets, while value and Asia took a breather. The Second Quarter in Bond Funds A respite from rising rates. 6 Charts: Second-Quarter Fund Returns Latin America, commodities lead stock funds, long-term bond funds recover. The Year in Funds So Far The funds that prospered last year now find themselves on a back foot, while last year's stragglers have recovered along with the economy. The Year in ETFs so Far Where have investors been putting their dollars?