How to Position Your Bond Portfolio as Short-Term Yields Fall

Plus – the outlook for AI stocks, obesity drug stocks, and more good news on inflation. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=58087&elqTrackId=84e4b15c38404e86bc203ea43b1a2596&elq=5789c685135a4b4e861b34bae99f4d34&elqaid=58087&elqat=1&elqCampaignId=29615&elqak=8AF5588AF5DCA95AAC7178610F06BCFA1A1502E78C7691883E8DDC4FE8703E42A6BD) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week's newsletter: - [How to Position Your Bond Portfolio as Short-Term Yields Fall]( - [AI Stocks May Be Down, but Don’t Count Them Out]( - [Obesity Drugs: Can New Firms Take Market Share From Eli Lilly and Novo Nordisk?]( - [August PCE Report: PCE Inflation Index Up 2.2%, Softer Than Expected]( With the Federal Reserve seemingly free to hack away at interest rates, stocks keep pushing to new record highs. With the gains to end the week, stocks are now reaching a 20% return for the year. 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 than 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 a primer on the 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 a 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](. 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. [How to Position Your Bond Portfolio as Short-Term Yields Fall]( [How to Position Your Bond Portfolio as Short-Term Yields Fall]( The yield curve is no longer inverted, which has important implications for investors. Sarah Hansen [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [August PCE Report: PCE Inflation Index Up 2.2%, Softer Than Expected]( [August PCE Report: PCE Inflation Index Up 2.2%, Softer Than Expected]( The PCE Price Index increased 0.1% in August Tom Lauricella [What’s the Difference Between the CPI and PCE Indexes?]( [What’s the Difference Between the CPI and PCE Indexes?]( Inflation is top of mind for investors, but there’s more than one way to measure consumer prices. Sarah Hansen [AI Stocks May Be Down, but Don’t Count Them Out]( [AI Stocks May Be Down, but Don’t Count Them Out]( As strong demand related to AI continues, monetization is growing and valuations are more attractive. Bella Albrecht [New 4-Star Stocks]( [New 4-Star Stocks]( Adobe and Mitsubishi UFJ Financial Group are among the stocks that fell into undervalued territory. Bella Albrecht [Managed Care Organizations: Investment Opportunities and Risks Ahead of the Election]( [Managed Care Organizations: Investment Opportunities and Risks Ahead of the Election]( Near-term regulatory risks in US healthcare could benefit long-term investors. Julie Utterback [What’s Happening in the Markets This Week]( [What’s Happening in the Markets This Week]( Jobs report, and Nike to report earnings. Frank Lee [Obesity Drugs: Can New Firms Take Market Share From Eli Lilly and Novo Nordisk?]( [Obesity Drugs: Can New Firms Take Market Share From Eli Lilly and Novo Nordisk?]( The next wave of GLP-1 drug competition will come from both public and private companies. Karen Andersen [How Fast Will Active Equity ETFs Grow?]( [How Fast Will Active Equity ETFs Grow?]( Likely not as fast as passives did; many are already on life support. Jack Shannon [Micron Earnings: Great Guidance but Stock Now Looks Fairly Valued]( [Micron Earnings: Great Guidance but Stock Now Looks Fairly Valued]( We see solid growth throughout 2025, aided by AI-related demand. William Kerwin [Our Top Pick for Investing in US Renewable Energy]( [Our Top Pick for Investing in US Renewable Energy]( Utility-scale solar and battery storage installations are poised to set records in 2024. Brett Castelli [Was Jack Bogle Right About Smart Beta All Along?]( [Was Jack Bogle Right About Smart Beta All Along?]( Smart-beta investors could have done better by being less clever. John Rekenthaler [10 Undervalued Wide-Moat Stocks]( [10 Undervalued Wide-Moat Stocks]( Cheap high-quality names from the Morningstar Wide Moat Focus Index are attractive stocks to buy for long-term investors. Susan Dziubinski [7 ‘Acorn’ Funds on Our Radar]( [7 ‘Acorn’ Funds on Our Radar]( These little funds have huge growth potential. Russel Kinnel [Are Low-Volatility ETFs Dead?]( [Are Low-Volatility ETFs Dead?]( These funds are down, but they’re not out. Daniel Sotiroff Popular This Week [The Best HSA Providers]( Learn how you could benefit from a health savings account and see our assessment of top providers. Greg Carlson, Margaret Giles [Climate Week and the UN: Risks and Opportunities for Investors]( After a year of extreme weather, a look at fossil-fuel-free funds, oil and gas CEO pay, and investing in nuclear energy. Leslie Norton [The Best Energy Stocks to Buy Now]( These five undervalued energy stocks look attractive today. Tori Brovet, Margaret Giles [10 Undervalued Wide-Moat Stocks]( Cheap high-quality names from the Morningstar Wide Moat Focus Index are attractive stocks to buy for long-term investors. Susan Dziubinski [How to Use Cash in a Portfolio]( A look at the pros and cons of the safest asset class, plus our favorite options. Amy Arnott [The Number One Way Americans are Becoming Millionaires]( The best investing may not always be thrilling. Danny Noonan [Recent Company Earnings]( Discover actionable opportunities today with our earnings coverage and analyst insights. What are the secrets to a healthy, happy, and wealthy retirement? Find out with Christine Benz's new book, "How to Retire". [Pre-order today.]( 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