Mega-Cap Stocks Have Been Leading the Latest Rally. What's Ahead?

Plus: Is Alphabet stock a buy before earnings, when will the Fed cut rates and the bad news for growth fund investors. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=44354&elqTrackId=06960f0ce8ad48b7832f3ef5c6bb2222&elq=f074ad7ef6ea4543b2c32db9d6388264&elqaid=44354&elqat=1&elqCampaignId=21470) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this newsletter: - [Mega-Cap Stocks Are Leading the Latest Rally. What’s Ahead?]( - [Is Alphabet’s Stock a Buy Before Earnings?]( - [This Year’s Top-Performing Growth Funds Can’t Erase Longer-Term Losses]( - [When Will the Fed Start Cutting Interest Rates?]( - [Stocks Are in Limbo. What Should Investors Do Now?]( Back when I started as a reporter covering the markets, I loved the way traders talked about what was happening out there. One of my favorite phrases was "dead-cat bounce." Before I start getting hate mail, know that I love cats. [It's just an expression](. What I'm referencing is the mega-cap stocks that powered higher through the end of the first quarter. These are many of the same stocks that crushed portfolios in 2022. The question now is whether the rally can be sustained, or if it was a proverbial dead-cat bounce. Lauren Solberg [takes a look under the hood](. The reality is that beyond the big gains on stocks like Meta and Nvidia, the overall stock market has been going nowhere fast since November. Another piece of Wall Street lingo worth getting to know: trading range. [In our weekly markets wrap]( we get the views of some top strategists on what's keeping the market in limbo and what this means for your portfolio. Not to be a [Debbie Downer]( but even as the rally in Big Tech has powered growth-stock funds to double-digit gains this year, investors in many of 2023's top-performing funds are still nursing big losses from the past 12 months. [Katherine Lynch takes a close look at the numbers]( on this year's performers and also finds some solid funds that have staved off the worst of those returns. Although it's a little bit of a spoiler, it's probably not much of a surprise that one of the factors holding back the stock market is the uncertainty about what the Federal Reserve will be doing in the months ahead. Morningstar's senior U.S. economist Preston Caldwell is out with his latest [forecasts on the economy]( and when he thinks the [Fed will lower interest rates](. Lastly, folks, it's earnings season, and we've ramped up our coverage. We're looking ahead to what investors should be thinking about stocks like [Alphabet]( and [Boeing]( ahead of their reports. We look at the results from [AT&T]( [Tesla]( and [Procter & Gamble](. You can find more [earnings coverage here]( and for all our reporting on key market trends, check out the [Markets page]( on Morningstar.com. [Mega-Cap Stocks Are Leading the Latest Rally. What’s Ahead?]( [Mega-Cap Stocks Are Leading the Latest Rally. What’s Ahead?]( Valuations on many of the largest stocks may be less attractive. Lauren Solberg [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Morningstar Specialists [Stocks Are in Limbo. What Should Investors Do Now?]( [Stocks Are in Limbo. What Should Investors Do Now?]( Uncertainty about the economy, Fed policy, and earnings have stocks moving in tighter ranges. Tom Lauricella, Katherine Lynch [Is Alphabet’s Stock a Buy Before Earnings?]( [Is Alphabet’s Stock a Buy Before Earnings?]( With a focus on search revenues and cloud for first quarter results, here’s what we think of Alphabet’s stock. Ali Mogharabi [Is Boeing’s Stock a Buy or a Sell Before Earnings?]( [Is Boeing’s Stock a Buy or a Sell Before Earnings?]( With a focus on regaining prepandemic production levels for first-quarter results, here’s what we think of Boeing’s stock. Nicolas Owens [4 Gold Stocks to Consider]( [4 Gold Stocks to Consider]( With gold prices on the rise, here’s Morningstar’s take on several gold mining stocks today. Jon Mills [What Beat the S&P 500 Over the Past Three Decades? Doing Nothing]( [What Beat the S&P 500 Over the Past Three Decades? Doing Nothing]( A strategy of buying a basket of stocks and leaving them untouched outperformed the index, not to mention scores of active managers. Jeffrey Ptak [What Will the Upcoming GDP Report Show About the U.S. Economy?]( [What Will the Upcoming GDP Report Show About the U.S. Economy?]( GDP growth in the first quarter is likely to look solid, but we expect a drop-off after that. Preston Caldwell [2023 Proxy Season: What to Expect for Climate Resolutions]( [2023 Proxy Season: What to Expect for Climate Resolutions]( During proxy season, every week is Earth Week. Lindsey Stewart [This Year's Top-Performing Growth Funds Can't Erase Longer-Term Losses]( [This Year's Top-Performing Growth Funds Can't Erase Longer-Term Losses]( Some of this year'€™s top performers have the worst trailing returns. Katherine Lynch [More Lessons From the Do Nothing Portfolio]( [More Lessons From the Do Nothing Portfolio]( Success also comes to those who stand and wait. John Rekenthaler [Profitable Lessons From the Bad Timing of Other Investors]( [Profitable Lessons From the Bad Timing of Other Investors]( Patience rewards, greed kills. Russel Kinnel [U.S. Government’s Investment Options Are Good but Could Be Great]( [U.S. Government’s Investment Options Are Good but Could Be Great]( The U.S. Federal Thrift Savings Plan’s Lifecycle Funds’ unique status as part of a huge government entity is a blessing and a curse. Janet Yang Rohr, CFA [Where Should Investors Stash Their Safe Money Today?]( [Where Should Investors Stash Their Safe Money Today?]( Financial planning expert Michael Kitces shares a framework for balancing yield and safety in investors’ cash holdings. Christine Benz Chart of the Week [When Will the Fed Start Cutting Interest Rates?]( [When Will the Fed Start Cutting Interest Rates?]( Our latest economic forecast for interest rates, inflation, and GDP growth. Preston Caldwell [Read More]( Share: [facebook]( [twitter]( [linkedin]( Earnings [Fifth Third Earnings: Manageable Decline in Net Interest Income Outlook, Stock Still Undervalued]( [Huntington Bank Earnings: Not Much Affected by Sector Turmoil]( [KeyCorp Earnings: Deposit Base Increases Slightly Even as Funding Costs Rise]( [Truist Earnings: Funding Costs Accelerate, but Hit to Profitability Should Be Manageable]( [Zions Bank Earnings: Earnings Pressure Is Building, but It’s Manageable]( [U.S. Bancorp Earnings: Slight Drop in Revenue Outlook, but Capital Build Should Remain on Track]( [Regions Financial Earnings: Barely Seeing Any Effects From Banking Industry Turmoil]( [AT&T Earnings: Weak Cash Flow and Slower Customer Growth No Cause for Concern]( [Procter & Gamble Earnings: Price, Productivity Juice Profits, but Headwinds Remain]( [Tesla Earnings: Price Cut Strategy Hitting Margins]( [United Airlines Earnings: On Course To Achieve Strong 2023 Results on International Travel Rebound]( [Kinder Morgan Earnings: Natural Gas Business Outperformance Offsets Weaker Oil and Gas Prices]( [SQM and Albemarle: Chile Lithium Nationalization Proposal Would Impact SQM With Little Change to ALB]( 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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