Dozens of Stocks Are Newly Undervalued After Market Selloff

Plus: Where to invest in the market rotation, Mag 7 valuations, what caused the big selloff? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=56674&elqTrackId=781f3fa0d91343018cf6a6601b7b7fe3&elq=fa3db3d3d2c84a7a841793f255c97f45&elqaid=56674&elqat=1&elqCampaignId=28894&elqak=8AF536C54F4F53CA3653C21E744814E011443BF538297FB67834C33204FC4B0E79B4) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week's newsletter: - [Dozens of Stocks Are Newly Undervalued After Market Selloff]( - [Where to Invest During the Stock Market Rotation]( - [What Caused the Stock Market Selloff?]( - [Magnificent Seven Stocks Slide, Valuations Looking ‘More Interesting’]( - [Municipal Bonds Funds: Where to Find Opportunities in a Volatile Market]( - [These Funds Have Taken Big Hits in the Tech Stock Rout]( The stock market hit quite the air pocket this past week. US stocks collapsed roughly 3% on Monday, following big losses the previous week. On the surface, the downdraft seemed to be a continuation of the ([overblown]( recession fears sparked by the previous week’s jobs report. But this was, in truth, the kind of market noise we often caution investors about. As [Sarah Hansen explains]( in this video with Ivanna Hampton, much of the blame can be put on hedge fund traders who decided en masse to exit trade in Japan. So on Tuesday, the market stabilized and the panic abated. By week’s end, stocks were essentially flat from where they were a week ago, though down roughly 6% from a mid-July high. Under the hood, there’s even more going on. First, there’s a “rotation” in progress, meaning the dominant market trends are fading in favor of new ones. This can be seen in the recent poor performance of the so-called Magnificent Seven, which have gone from leading the market to leading it down. However, valuations among these stocks now look “more interesting,” according to Morningstar’s research. [Check out our story here]( on which Mag Seven stocks are looking attractive. At a broader level, how can investors play this rotation in their portfolios? [Hansen digs into recommendations]( from stock market strategists on where the opportunities may lie. Meanwhile, the selloff has created a flood of stocks that are now trading in undervalued territory. [Bella Albrecht counts up]( the dozens of stocks Morningstar analysts think are newly undervalued, and comes up lists of some of the biggest names. Lastly, we’ve got a pair of fund stories to highlight. First, [Gabe Albert screens]( for the stock funds that have taken the biggest losses from the downturn in tech stocks. The list includes a handful of funds from Jennison, and a big Fidelity fund. And [Elizabeth Foos highlights]( some municipal bond funds worth checking out to find a haven from market turmoil. That’s it for this week! As always, check out our [Markets page]( for our latest coverage, live stock market updates, and [our weekly calendar]( of key upcoming data and events. [Dozens of Stocks Are Newly Undervalued After Market Selloff]( [Dozens of Stocks Are Newly Undervalued After Market Selloff]( Amazon and Micron are among the stocks that fell into 4-star territory, while British American Tobacco and Diageo are rated 5 stars. Bella Albrecht [See Stocks]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [These Funds Have Taken Big Hits in the Tech Stock Rout]( [These Funds Have Taken Big Hits in the Tech Stock Rout]( Large-cap growth funds from Jennison and Fidelity are among those most hurt in the selloff. Gabe Alpert [Where to Invest During the Stock Market Rotation]( [Where to Invest During the Stock Market Rotation]( Strategists point to utilities, industrials, and energy, but the jury is out on small caps. Sarah Hansen [What Caused the Stock Market Selloff?]( [What Caused the Stock Market Selloff?]( Investors worry that a recession is back on the table. Sarah Hansen [Municipal Bonds: Where to Find Opportunities in a Volatile Market]( [Municipal Bonds: Where to Find Opportunities in a Volatile Market]( Despite unusual market volatility, munis can provide a boon for shrewd bargain-hunters. Elizabeth Foos [Magnificent Seven Stocks Slide, Valuations Looking ‘More Interesting’]( [Magnificent Seven Stocks Slide, Valuations Looking ‘More Interesting’]( Two of the mega-cap stocks that led the market higher are undervalued. Bella Albrecht [Markets Brief: Will the CPI Allow the Fed to Cut Rates in September?]( [Markets Brief: Will the CPI Allow the Fed to Cut Rates in September?]( CPI on deck this week as bargains emerge after the stock market selloff. Leah Breakstone [Now’s the Time to Diversify Beyond the ‘Magnificent Seven’ Stocks]( [Now’s the Time to Diversify Beyond the ‘Magnificent Seven’ Stocks]( And does the Federal Reserve really need to make an emergency rate cut? Bryan Armour, Ivanna Hampton, Sarah Hansen, Preston Caldwell [3 Good ETFs When Interest Rates Fall]( [3 Good ETFs When Interest Rates Fall]( Interest-rate cuts could flip the script for these funds. Ryan Jackson [The AI Revolution Is Ready to Power Up. It Just Needs Electricity]( [The AI Revolution Is Ready to Power Up. It Just Needs Electricity]( Our top US utilities picks in key regions for AI data center growth. Travis Miller, Andrew Bischof [Here’s What Sparked Monday’s Stock Market Madness]( [Here’s What Sparked Monday’s Stock Market Madness]( Why global markets plunged—and why you shouldn’t bail on your long-term plan. Sarah Hansen, Ivanna Hampton [A Great Company That’s a Turtle, Not a Hare]( [A Great Company That’s a Turtle, Not a Hare]( Warren Buffett’s sweetest investment demonstrates how stocks need not be growth companies to create fortunes. John Rekenthaler [After Earnings, Is Apple Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Apple Stock a Buy, a Sell, or Fairly Valued?]( With strong expectations for iPhone growth, here’s what we think of Apple stock. William Kerwin [After Earnings and a Selloff, Is Amazon Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings and a Selloff, Is Amazon Stock a Buy, a Sell, or Fairly Valued?]( With AWS returning to growth mode and a strong position to meet AI demand, here’s what we think of Amazon stock. Dan Romanoff [After Earnings, Is Coinbase Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Coinbase Stock a Buy, a Sell, or Fairly Valued?]( With retail trading still volatile and strong growth in subscriptions and services, here’s what we think of Coinbase stock. Michael Miller [Is Arm Stock a Buy After Earnings?]( [Is Arm Stock a Buy After Earnings?]( The semiconductor and software design company’s new computer architecture is its main growth driver. Javier Correonero [After Earnings, Is Berkshire Hathaway Stock a Buy?]( [After Earnings, Is Berkshire Hathaway Stock a Buy?]( With the firm’s cash balance reaching a record high, here’s what we think of Berkshire stock. Greggory Warren [Is Albemarle Stock a Buy After Earnings?]( [Is Albemarle Stock a Buy After Earnings?]( Low lithium prices slow growth plans for the undervalued stock. Seth Goldstein [After Earnings and a Big Selloff, Is Moderna Stock a Buy?]( [After Earnings and a Big Selloff, Is Moderna Stock a Buy?]( The company faces high competition in the covid and RSV vaccine markets, leading to lower product sales forecasts. Karen Andersen [Is Intel Stock a Buy After Earnings?]( [Is Intel Stock a Buy After Earnings?]( Poor results prompt concerns about competition. Brian Colello [After Earnings, Is Meta Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Meta Stock a Buy, a Sell, or Fairly Valued?]( With an increase in fair value estimate and demand for ad inventory, here’s what we think of Meta stock. Michael Hodel [After Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?]( With Azure growth guided to accelerate and a pullback in share price, here’s what we think of Microsoft stock. Dan Romanoff [Going Into Earnings, Is Home Depot Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Home Depot Stock a Buy, a Sell, or Fairly Valued?]( With volatile consumer behavior and details on SRS acquisition integration, here’s what we think of Home Depot stock. Taylor Wilson [What’s Happening in the Markets This Week]( [What’s Happening in the Markets This Week]( Monthly Consumer and Producer Price Index reports released. Leah Breakstone [Worst-Performing Stock ETFs of the Month]( [Worst-Performing Stock ETFs of the Month]( Castleark Large Growth ETF and Nuveen Growth Opportunities ETF were among the worst-performing ETFs in July 2024. Bella Albrecht, Lauren Solberg [Top-Performing Stock ETFs for the Month]( [Top-Performing Stock ETFs for the Month]( SPDR SSGA US Small Cap Low Volatility Index ETF and iShares US Small Cap Value Factor ETF were among the best-performing ETFs in July. Bella Albrecht, Lauren Solberg [10 Best Growth Stocks to Buy for the Long Term]( [10 Best Growth Stocks to Buy for the Long Term]( The stocks of these high-quality growth companies look undervalued today. Margaret Giles Chart of the Week [Current Market Insights: 9 Charts You Shouldn't Miss]( [Current Market Insights: 9 Charts You Shouldn't Miss]( This month: the small-cap rotation, looming Fed-rate cuts, and cash on the move. Danny Noonan [See Charts]( Share: [facebook]( [twitter]( [linkedin]( Recent Earnings [Oxy: Cost-Efficient Production and Low Operating Expenses Create Solid Results]( [Eli Lilly: Strong Diabetes and Obesity Sales Continue]( [Novo Nordisk: Wegovy Supply, Obesity Pipeline in Focus]( [Paramount: Streaming Strength and Cost-Savings Plan Overshadow Revenue Weakness]( [Disney: Experiences Softness Weighs on Results, but Much of Business Has Turned Up]( [Uber: Bookings Growth Dovetails With Improved Profitability in the Second Quarter]( [Palantir: AI Momentum Lifts Sales and Guidance]( [Lumen: Mostly Poor Results, but Recent Contract Wins Suggest an Upturn]( [Exxon: Strong Quarter Demonstrates Progress on Long-Term Objectives]( [Berkshire Hathaway: Strong Insurance Results Continue to Lift Revenue and Profitability]( [Recent Company Earnings]( Discover actionable opportunities today with our earnings coverage and analyst insights. Get Top Stock Picks and Market Insights Every Week on The Morning Filter. Every Monday morning, Susan Dziubinski sits down with Morningstar Chief U.S. markets strategist Dave Sekera to discuss what's on his radar, new Morningstar research, and stock picks or plans for the week ahead. [Watch Now.](morningstar/streams?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=56674) Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2024 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602