Are We in a New Bull Market, Stuck in the Bear Market, or Going Sideways?

Plus: Undervalued video game stocks; should Fidelity investors just index? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=42336&elqTrackId=ea053cc767124753bca82926cd416bbe&elq=fbfde83945414bfbbe7c765dbbd594cd&elqaid=42336&elqat=1&elqCampaignId=20347) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week’s newsletter: - [3 Stock Strategists and 3 Scenarios for the Stock Market in 2023]( - [Markets Brief: January CPI Report Forecasts Show a Bump in the Road to Lower Inflation]( - [Should Fidelity Investors Just Index?]( - [6 Undervalued Video Game Stocks]( - [Why Bank Stocks Might Not Be a Good Buy Right Now]( 120 days and counting. As I write this, that’s how long it has been since the most recent bear market low for stocks set back on Oct. 14. Coincidentally, it was 120 days between the first bear market low of this cycle in June and the October bottom. (Cue the Twilight Zone [theme music](. Is this the start of a new bull market? Is this another head fake with a fresh drop to new lows in the cards? Or will the stock market just bounce around this year but not head decisively in either direction? Sandy Ward checked in with three stock market strategists, one a bull, one a bear, and one who says we’re in for a volatile trip to nowhere this year and highlights [the arguments in favor of their forecasts](. Of course, one of the big dividing lines around the outlook for stocks, as well as bonds, is how much higher the Federal Reserve will raise interest rates and how long it will keep them there. Central to answering that question will be the outlook for inflation, and the coming week will bring the latest Consumer Price Index reading. As Lauren Solberg explains in her [preview of the January CPI report]( following the hot January jobs report, economists say the road to lower inflation is going to be increasingly bumpy. (Also check out The Long View podcast [here]( which has a great interview with Schwab’s Kathy Jones on the outlook for inflation and the bond market.) Speaking of the Fed, one group of stocks generally seen as benefitting from higher rates are banks, which can earn more off higher-interest loans. However, [as we report here]( Morningstar bank analyst Eric Compton says that the tailwind may be over, and with a potential recession ahead, investors should tread carefully with bank stocks. But for an intriguing set of opportunities, our stock screen this week focused on video game stocks. We highlight [6 undervalued gaming stocks]( as well as some gamer lingo that I learned just for the purposes of this story. Among other deep dives: is Meta Platforms [stock still a buy?]( And a look at [the best growth stock funds](. Lastly, this week, John Rekenthaler takes a look at Fidelity’s actively managed stock funds, compares their performance to the fund giant’s index funds, and asks “should Fidelity investors just index?" John performed this exercise with Vanguard back in August with [surprising results](. What did he find out this time? No spoilers from me. You’ll have to [read the story](. As always, to keep up on our latest moves in the market and our complete coverage, check out the [Markets page]( on Morningstar.com. [3 Stock Strategists and 3 Scenarios for the Stock Market in 2023]( [3 Stock Strategists and 3 Scenarios for the Stock Market in 2023]( Are we in a new bull market, stuck in the bear market, or going sideways? Sandy Ward [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [Markets Brief: January CPI Report Forecasts Show a Bump in the Road to Lower Inflation]( [Markets Brief: January CPI Report Forecasts Show a Bump in the Road to Lower Inflation]( A hot reading on inflation in the CPI report could mean higher rates for longer. Lauren Solberg [3 Top Small-Cap Stocks to Buy and Hold in 2023]( [3 Top Small-Cap Stocks to Buy and Hold in 2023]( These companies may be small but their competitive advantages are big—and their stock prices are cheap, too. Susan Dziubinski [Kathy Jones on Inflation: ‘The Worst Is Behind Us’]( [Kathy Jones on Inflation: ‘The Worst Is Behind Us’]( Charles Schwab’s chief fixed-income strategist on the interest-rate picture, the jobs market, the recession outlook, housing, and more. Christine Benz, Jeff Ptak [6 Undervalued Video Game Stocks]( [6 Undervalued Video Game Stocks]( These stocks are trading at attractive prices after losing a battle to the bear market. Margaret Guidici [10 Questions for BlackRock’s Wei Li]( [10 Questions for BlackRock’s Wei Li]( The chief investment strategist looks toward a turbulent 2023. Laura Lallos [Utilities Suddenly a Growth Sector? ]( [Utilities Suddenly a Growth Sector?]( Electric cars and clean energy give firms great growth potential, with plenty of room to run. Laura Lallos [Should Fidelity Investors Just Index?]( [Should Fidelity Investors Just Index?]( Assessing the quality of the company’s actively managed funds. John Rekenthaler [Apple Stock Versus Microsoft Stock: Which Is the Better Buy Now?]( [Apple Stock Versus Microsoft Stock: Which Is the Better Buy Now?]( Both companies face economic pressures in 2023. But one of these stocks is attractive today. Susan Dziubinski [Disney Reports Decent Earnings With Iger Already Reapplying His Stamp]( [Disney Reports Decent Earnings With Iger Already Reapplying His Stamp]( Maintaining $155 fair value estimate; Disney stock undervalued. Neil Macker [Uber Reports Impressive Q4; Strong 2023 Growth Expected]( [Uber Reports Impressive Q4; Strong 2023 Growth Expected]( Reducing Uber stock’s fair value estimate to $68 from $73; shares undervalued. Ali Mogharabi [3 Travel Stocks to Buy Right Now]( [3 Travel Stocks to Buy Right Now]( Also, what we think about Microsoft’s long-term growth and how Secure Act 2.0 changes RMD rules. Morningstar Chart of the Week [Why Bank Stocks Might Not Be a Good Buy Right Now]( [Why Bank Stocks Might Not Be a Good Buy Right Now]( A tug of war between recession fears and benefits of higher rates has left bank stocks in limbo. Jakir Hossain [Read More]( Share: [facebook]( [twitter]( [linkedin]( Popular This Week [The 10 Best Companies to Invest in Now]( The undervalued stocks of high-quality companies are compelling investments today. Susan Dziubinski [3 Dividend Stocks for February 2023]( A look at three dividend payers with wide or narrow Morningstar Economic Moat Ratings. David Harrell [How Much Portfolio Insurance Do You Need?]( Protecting against risk that cannot be quantified. John Rekenthaler [How Much Will My Social Security Benefit Be?]( We explain the requirements, taxes, and rules for this federal program. Carole Hodorowicz [Can a Taxable Account Beat a 401(k)?]( Investment quality and expenses, as well as tax costs, are big swing factors. Christine Benz Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. 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