Insights
into
key
market
performance
and
economic
trends
from
Dan
Kemp,
Morningstar’s
global
chief
research
and
investment
officer.
The
Morningstar
US
Market
index
rose
0.67%
with
lower-growth
sectors
such
as
financials
and
energy
typically
outpacing
companies
expected
to
generate
more
rapid
profit
growth.
Investors
Keen
on
Corporate
Bonds
The
fixed
income
markets
showed
small
movement
in
yields,
credit
spreads
or
expectations
for
future
interest
rates.
Government
bonds
continue
to
offer
high
real
(i.e.
net
of
inflation)
yields
for
investors
relative
to
that
available
in
the
recent
past.
It
is
not
surprising
that
investors
are
continuing
to
‘pile
into
bond
funds’
in
the
words
of
Morningstar
analysts
Adam
Sabban
and
Ryan
Jackson
in
their
latest
fund
flow
report.
Investors
are
also
enthusiastic
about
corporate
bonds,
despite
the
higher
expected
correlation
with
equity
prices
and
unusually
skinny
credit
spreads.
As
ever
with
fixed
income
investing,
it
is
important
to
be
clear
about
why
you
own
the
investment
as
confusion
on
this
point
can
lead
to
expensive
mistakes
during
periods
of
market
volatility.
You
can
access
Morningstar’s
latest
fund
flow
report
here.
Story
Stocks
Plummet
The
market
was
not
quiet
everywhere
with
some
investors
experiencing
a
painful
reminder
of
what
happens
when
investing
is
divorced
from
financial
analysis
and
instead
used
as
a
proxy
for
a
political
or
cultural
view.
Both
GameStop
(GME)
(down
17%)
and
Trump
Media
&
Technology
Group
(DJT)
(down
25%)
are
example
of
companies
whose
owners
appear
to
be
are
more
focused
on
supporting
a
view
rather
than
maximizing
long-term
returns.
To
help
investors
avoid
these
situations,
Morningstar
Wealth’s
Danny
Noonan
unpacks
this
challenges
of
mixing
politics
and
investing
here.
Beyond
Nvidia
Market
leader
Nvidia
(NVDA)
fell
4%
over
the
week
having
briefly
become
the
most
valuable
company
listed
on
the
US
markets.
Following
extraordinary
growth
in
the
adoption
of
generative
AI
over
the
last
18
months,
this
topic
continues
to
dominate
the
minds
of
investors.
While
Nvidia
has
become
the
default
way
of
investing
in
this
area,
Morningstar’s
technology
equity
analysts
William
Kerwin
and
Brian
Colello
believe
that
there
are
other
companies
that
should
also
be
considered
by
investors
wishing
to
access
this
industry.
Their
report
is
available
here.
PCE
Inflation
Due
Inflation
is
back
on
the
menu
next
week
with
the
Fed’s
preferred
measure
of
price
change:
the
Personal
Consumption
Expenditures
index
(PCE),
expected
to
show
a
further
decline
in
inflation
to
an
annualised
rate
of
2.6%
in
May
at
both
the
headline
and
core
levels
(source:
MarketWatch).
If
the
outcome
matches
this
expectation
of
a
continued
slow
decline
in
inflation,
we
can
expect
investors
to
become
more
confident
in
the
current
consensus.
In
which
case
the
market
may
continue
to
be
quiet
allowing
investors
to
focus
on
long
term
opportunities
rather
than
responding
to
market
noise.
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