Are the ‘Magnificent Seven’ Stocks Now Overpriced?

Plus: 5 growth stocks from a top Fidelity manager, the best-performing large-blend funds, and investors bail on value funds. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=45958&elqTrackId=f50805ae5a9146efa89176e7516a6386&elq=3b653a40bbe04ae391b81b8bc8a9e578&elqaid=45958&elqat=1&elqCampaignId=22546) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week’s newsletter: - [The ‘Magnificent Seven’ Stocks Have Driven the Rally, but Are They Too Expensive Now?]( - [5 Growth Stock Picks From a Top Fidelity Manager]( - [Investors Bail on Large-Value Stock Funds]( - [14 Top-Performing Large-Blend Funds]( - [What the Writers Guild Strike Means for Your Investment Portfolio]( - [Midyear Market Checkup: An Unusual Rally and Sticky Inflation]( With one week to go in the first half of 2023, the stock market seems to be holding its own, up more than 15% this year. That may leave us in the red from where we started 2022, but it’s at least some relief. But as we’ve been [reporting]( this has been one heck of an unusual rally. Pretty much all of this year’s gains have come thanks to what the acronym- and nickname-fixated market pundits are calling the “Magnificent Seven” stocks. In our [mid-year markets checkup]( I chatted with our video editor Ivanna Hampton, diving into the first half’s major trends and the outlook from here. The good news is that if you own a broad market index fund, gains are gains, whether it’s all the stocks or just seven. But when it comes to owning those seven stocks—which include Nvidia, Apple, and Tesla—as well as the durability of the escape from the bear market, the outlook for those names is critical. Are those stocks still cheap? We [take a look here](. Some of those same stocks have featured heavily in the portfolio of one of the best and biggest actively managed stock funds: Fidelity Blue Chip Growth. Sonu Kalra may not be a household name, but since 2009 he’s led this fund to a remarkable track record. In the second installment in a series, I spoke with Kalra about [five of his top stock picks](. Speaking of top-performing funds, our weekly fund screen delves into one of the foundational building blocks for just about any portfolio (likely including yours): large-blend funds. You may not know the Morningstar Category, but think S&P 500 funds, as well as funds that try to beat that index. We [highlight 14 large-blend funds]( that have consistently outperformed over the last five years. Elsewhere in mutual fund land, in what certainly smacks of performance-chasing, investors have already turned tail on one of last year’s best-performing groups: large-value funds. Katherine Lynch takes a look under the hood at some of the funds seeing the biggest investor exoduses, and [the answers might surprise you](. Lastly, as you try to figure out what to stream this weekend, [we’ve got a look]( at the Writers Guild strike from an investment perspective, and highlight an interesting lesson about the concept of human capital. It’s a great read. As always, check out our [Markets page]( on Morningstar.com for our latest coverage, along with our live stock market updates. [Markets Brief: The 'Magnificent Seven' Stocks Have Driven the Rally, but Are They Too Expensive Now?]( [Markets Brief: The 'Magnificent Seven' Stocks Have Driven the Rally, but Are They Too Expensive Now?]( The nascent bull market could run out of steam unless gains broaden beyond stocks like Nvidia and Meta. Caryl Anne Francia [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [‘Unusual’ Stock Rally and Today’s Sticky Inflation]( [‘Unusual’ Stock Rally and Today’s Sticky Inflation]( Also, how bonds have rebounded from history’s worst market, and what to watch for in the second half of the year. Morningstar [5 Growth Stock Picks From a Top Fidelity Manager]( [5 Growth Stock Picks From a Top Fidelity Manager]( Fidelity Blue Chip Growth manager Sonu Kalra highlights some favorite names, including Nvidia, Snap, and Eli Lilly. Tom Lauricella [Investors Bail on Large-Value Stock Funds]( [Investors Bail on Large-Value Stock Funds]( Record outflows in May come as investors reverse course from 2022 inflows and exit value index funds. Katherine Lynch [The Best Wide-Moat Growth Stock You’ve Never Heard Of]( [The Best Wide-Moat Growth Stock You’ve Never Heard Of]( The stock of this niche software leader is undervalued. Dan Romanoff [The Best Investments for the Core of Your Portfolio]( [The Best Investments for the Core of Your Portfolio]( And how large the core portion of your portfolio should be. Amy Arnott, Susan Dziubinski [Top 10 Holdings of Our Ultimate Stock-Pickers’ Index]( [Top 10 Holdings of Our Ultimate Stock-Pickers’ Index]( Actively managed U.S. large-cap funds continued to lag in 2022. Ari Felhandler, Eric Compton [Is Bitcoin Worth the Gamble?]( [Is Bitcoin Worth the Gamble?]( What we’ve learned from tackling the most common approaches to valuing this cryptocurrency. Madeline Hume [What Does BlackRock’s Bitcoin ETF Mean for Cryptocurrencies?]( [What Does BlackRock’s Bitcoin ETF Mean for Cryptocurrencies?]( As the world’s largest asset manager, BlackRock would immediately give legitimacy to the Bitcoin market in need of it. Bryan Armour [Tesla Stock: The Impact of Opening the Supercharger Network]( [Tesla Stock: The Impact of Opening the Supercharger Network]( And what the company’s move means for EV charging stocks. Susan Dziubinski [Are Robo-Advisors Worth Your Investment?]( [Are Robo-Advisors Worth Your Investment?]( Digital investment advice offers automated portfolios and cheaper fees, but talking with a person might appeal to some investors. Ivanna Hampton [TIPS Ladder Funds Don’t Yet Exist, but They Should]( [TIPS Ladder Funds Don’t Yet Exist, but They Should]( Finally, a new fund proposal that makes sense. John Rekenthaler [Bank Blowups Trigger Portfolio Changes]( [Bank Blowups Trigger Portfolio Changes]( Funds scaled back exposure to financials, especially regional banks, in 2023′s first quarter. Katie Rushkewicz Reichart [3 Strong International Dividend ETFs]( [3 Strong International Dividend ETFs]( Diversifying internationally can boost income. Bryan Armour [Is UnitedHealth Stock a Buy, Sell, or Fairly Valued After Earnings?]( [Is UnitedHealth Stock a Buy, Sell, or Fairly Valued After Earnings?]( Here’s what we think of UnitedHealth stock as surging demand for healthcare could strain near-term margins. Julie Utterback [Is Adobe Stock a Buy, Sell, or Fairly Valued After Earnings?]( [Is Adobe Stock a Buy, Sell, or Fairly Valued After Earnings?]( With strong revenue and margins, here’s what we think of Adobe stock.. Dan Romanoff [3M’s Stock Is a Value Trap, as PFAS Settlement Doesn’t End the Risks to Shareholders]( [3M’s Stock Is a Value Trap, as PFAS Settlement Doesn’t End the Risks to Shareholders]( Lowering fair value estimate on 3M stock to $121; dividend safe for now, but may be in danger down the road. Joshua Aguilar [Ocado Shares Soar on Amazon Takeover Talk]( [Ocado Shares Soar on Amazon Takeover Talk]( With a fair value estimate of GBP 15.50, Ocado is one of the most significantly undervalued European stocks covered by Morningstar. James Gard [What the Writers Guild Strike Means for Your Investment Portfolio]( [What the Writers Guild Strike Means for Your Investment Portfolio]( Think media stocks, human capital risk, and unionization, for starters. Francesca Campo Chart of the Week [14 Top-Performing Large-Blend Funds]( [14 Top-Performing Large-Blend Funds]( S&P 500 funds, along with offerings from Fidelity and Vanguard, are among the group’s best performers. Sadhika Thapa [Read More]( Share: [facebook]( [twitter]( [linkedin]( Popular This Week [Talmon Smith: Assessing the Greatest Wealth Transfer in History]( The New York Times economics reporter on the state of the economy and inflation, tax policy, wealth inequality, and more. [How to Conduct a Midyear Investment Portfolio Review in 2023]( A step-by-step guide to ensure your investment portfolio is on track this year. [Do Private Investments Belong in a Diversified Portfolio?]( Yes and no. Really, it depends. [The Best Current Sources of Retirement Income]( Treasury bonds, TIPS ladders, or annuities? None are perfect, but each can be useful. [Obstacles the LGBTQ+ Community Faces When Seeking Financial Advice]( LGBTQ+ clients desperately need high-quality advisors they can trust. Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. 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](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602