Dave Sekera, Preston Caldwell, Adam Fleck
Morningstar’s Q3 2021 US Stock Market Outlook: Time to Trade Up in Quality
Stock prices are high, interest rates are low, and corporate credit spreads are tight. Is there anything left that’s undervalued? With the equity markets trading near record levels, will stocks continue to march ever higher? Or will the Fed take away the punch bowl? Following the rotation into value stocks thus far this year, are equity valuations of companies with Wide Economic Moats still being left behind?
As the pandemic continues to abate, the outlook for the U.S. economy remains robust and we project U.S. real GDP growth of 6.0% in 2021, 4.6% in 2022, and 3.4% in 2023. This aggressive growth is enabled by economic normalization as consumer spending shifts back to services from goods. However, inflation has reared its ugly head.
I'd like to personally invite you to join our webinar, taking place on Thursday, July 8 at 10:00 a.m. HKT / 11:00 a.m. JST, to learn why we think inflation will subside later this year and to help you understand current market dynamics and identify pockets of opportunity! You will also hear more details on our ESG Risk Rating Assessment in partnership with Sustainalytics.
In this continuation of our popular quarterly Market Outlook series, we’ll cover:
• Key valuation context that will help you explain the stock market outlook to your clients
• Provide an update regarding our revised outlook for the U.S. economy and inflation
• Review content enhancements we are implementing to include Environmental, Social, and Governance (ESG) issues into our analysis