Smart Investor: These Stocks Are Leading the Rally, Bank ETFs Jump, and Top Large-Value ETFs

While there’s still plenty of time left in 2024, we’re on track for a second consecutive year of 20%+ returns on stocks. That’s translating into an average annual return of nearly 14% on US stocks over the last five years. Even more impressive—and it’s easy to forget this—that period included 2022’s nasty bear market.

We’re still seeing some evidence of the third quarter’s big theme in the stock market, which was the rotation out of big-name technology stocks into value stocks. This past week, following the country’s biggest banks reporting their earnings for the quarter, bank stock ETFs jumped higher. Gabe Alpert looked at which stocks were leading this rally.

If you’re looking for a real deep dive into that rotation and the outlook for the market, check out our third-quarter webinar, hosted by Morningstar’s chief US market strategist Dave Sekera and senior US economist Preston Caldwell. Caldwell offers his take on the outlook for the economy, while Sekera outlines where Morningstar sees undervalued opportunities in stocks.

But in a bit of a twist, the rotation appears to be running out of steam. While it was the story for much of the third quarter, since stocks hit the August low, the market’s been experiencing a bit of déjà vu. Tech and AI stocks are again leading a rally. Bella Albrecht takes a look under the hood of the latest leg higher in the market to see which stocks are out front.

Speaking of looking under the hood, Leslie Norton explores the outlook for electric vehicle stocks. While it might seem like the future of EVs depends on the election—and there certainly could be a real impact—she explains that there are a lot more variables for investors to consider.

Lastly this week, we check in with large-value ETFs, which have seen returns improve thanks to that third-quarter rotation. We screened for the best performers over the last one-, three-, and five-year periods.

Want to stay informed with market insights from Morningstar? Sign up for my weekly newsletter.