How to Position Your Bond Portfolio as Short-Term Yields Fall
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Welcome to my weekly Morningstar markets and investing newsletter!?To sign up for the Saturday email version, scroll to the bottom of this post.
In this week’s newsletter:
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With the Federal Reserve seemingly free to hack away at interest rates, stocks keep pushing to new record highs.
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A big part of the story is the turn in inflation, where the news appears to be giving the Fed room to lower interest rates at a faster pace that most would have expected just a month ago. Case in point: the August Personal Consumption Expenditures Price Index report – the Fed’s preferred measure of inflation – came in much softer than expected. Here’s Morningstar’s take on the inflation news. (And for an explanation of difference between the PCE report and the Consumer Price Index, check out Sarah Hansen’s great explainer.)
This new landscape, where the Fed may well be on its way to another big rate cut, has important implications for bond investors. We’re now in a very different world than just a few months ago, where we were able to park our money in cash and earn 5%. We explore what’s next for your bond portfolio.
Back in the stock market, technology stocks have found new life after Summer swoon. But many of the big plays on the artificial intelligence boom remain down from their highs. What’s the outlook for AI stocks? Bella Albrecht checked in with Morningstar’s tech stock analysts to get their take on what’s next for this key group of companies.
Lastly, Morningstar strategist Karen Andersen digs into the landscape for obesity drugs, which have been dominated by Eli Lilly and Novo Nordisk. Will looming competition take market share? Here’s what Andersen thinks.
Check back for our next newsletter which will be chockablock (I love that word!) with Q3 reviews and Q4 previews!
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