From Morningstar: 2024-06-18 07:22:00

Dan Kemp, Morningstar’s global chief research and investment officer, shared insights on market performance and economic trends last week. The latest inflation data and the Fed’s decision to leave interest rates unchanged sparked optimism among investors. The CME FedWatch tool suggests expectations of more than one interest rate cut this year.

While the Morningstar US Market Index rose 1.44% last week, gains were concentrated in sectors like technology, communication services, consumer cyclical, and real estate. Technology stocks like Nvidia, Apple, Microsoft, and Broadcom were key drivers of the market return, accounting for about 80% of the gain.

Elon Musk’s $50 billion compensation package from Tesla shareholders surprised many. The belief in one individual’s value proposition mirrors the investment industry’s previous “star fund manager” culture and the importance of minimizing costs. Vanguard’s support of Musk’s package highlights the importance of cost management for investors.

This week, expect more Fed officials’ comments to shape market sentiment. While investor consensus can push prices far from their fair value, patience is key for those with a long-term approach. Market consensus often shifts when change is imminent, requiring investors to stay vigilant and maintain a valuation-driven strategy.



Read more at Morningstar: Markets Brief: 4 Stocks Made Up 80% of the Gains….