5 Semiconductor Stocks with Room to Rally

Plus: TIPS as a retiree’s best friend, why you need to know about financial conditions, and what ‘normal’ means for interest rates. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=48998&elqTrackId=2b3ab75936cc409eacecf75efb78be7c&elq=36b7952f3db247ffaea1a6a3152e3530&elqaid=48998&elqat=1&elqCampaignId=24384) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week's newsletter: - [5 Semiconductor Stocks That Still Have Room to Rally High]( - [TIPS Yields Are a Retiree’s Best Friend]( - [What Is ‘Normal’ for Interest Rates?]( - [What Does It Mean That Financial Conditions Are Tightening?]( - [Is Meta Stock a Buy Ahead of Earnings?]( The Federal Reserve might be done raising interest rates, but that doesn’t mean the markets are out of the woods. That was plain this past week in both the stock and bond markets. The selloff in bonds continued, with the yield on the U.S. Treasury 10-year note touching the psychologically [important 5% mark](. That in turn deflated stock prices, especially growth stocks, leaving the market down 2.4% for the week. If you’re a regular reader of this newsletter, you know we’ve been focused for weeks now on rising bond yields – why it’s happening and why it matters. We continued our coverage this week, starting Monday with my piece on why the [budget deficit suddenly matters](. Sarah Hansen picked up the baton with a pair of articles, the first of which [puts the current rise in rates in context](. You can learn what it means if we’re back to normal after a long period of abnormally low rates. Hansen’s second piece, part of our weekly Markets Brief series, looks at one of the important implications of rising bond yields: tightening financial conditions. What does that mean, and how do you know if conditions are “tightening”? [Sarah explains here](. We also continue to explore the opportunities higher rates are offering investors. Last week, John Rekenthaler explored what higher yields on government bonds can mean for how much money [retirees can]( withdraw from their portfolios](. This week, Rekenthaler digs deeper and explains why he is now a big fan of retirees inflation-protected bonds]( to their nest eggs. Elsewhere, we revisit a corner of the stock market responsible for big gains this year: semiconductor stocks. While there are big names that are up double or even triple digits (hello, Nvidia), there remain a number of semiconductor stocks trading in undervalued territory. We’ve got [five names for you](//www.morningstar.com/stocks/5-semiconductor-stocks-that-still-have-room-rally?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=48998&elqTrackId=468379e7f171415289b7db54f031edc8&elq=36b7952f3db247ffaea1a6a3152e3530&elqaid=48998&elqat=1&elqCampaignId=24384). Meanwhile, earnings season is rolling on. We’ve got what Morningstar’s analysts will be looking for when [Meta]( [Alphabet]( and [GE]( report this coming week. In addition, Morningstar analysts weigh in on results from [Tesla]( [Netflix]( and [AT&T.]( Lastly this week, we take a look at an expanding part of the toolkit for investors: actively managed exchange-traded funds. ETFs have traditionally been index funds, but in recent years more and more active funds have emerged. And one area seeing an influx of investors is value-stock ETFs, which include the likes of American Funds parent company Capital Group. Katherine Lynch [explores](//www.morningstar.com/stocks/5-semiconductor-stocks-that-still-have-room-rally?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=48998&elqTrackId=24df2c2a0732449d94464e552d075379&elq=36b7952f3db247ffaea1a6a3152e3530&elqaid=48998&elqat=1&elqCampaignId=24384). That's it for the 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, including key earnings reports.. Did a friend forward this email? [Sign up here](. [5 Semiconductor Stocks That Still Have Room to Rally]( [5 Semiconductor Stocks That Still Have Room to Rally]( Skyworks Solutions and NXP are among the undervalued semiconductor stocks. Jülide Sengil [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [What Is ‘Normal’ for Interest Rates?]( [What Is ‘Normal’ for Interest Rates?]( While yields may be near their peak, the current range of rates could persist for some time. Sarah Hansen [What Does It Mean That Financial Conditions Are Tightening?]( [What Does It Mean That Financial Conditions Are Tightening?]( Even if the Fed is done raising interest rates, other factors point to screws tightening on the economy. Sarah Hansen [Weekly Markets Planner: Economics Calendar, Company Earnings, Investor Relations Events]( [Weekly Markets Planner: Economics Calendar, Company Earnings, Investor Relations Events]( Alphabet, Meta report earnings, Q3 GDP and PCE Deflator on deck. Tom Lauricella [How Time Horizon Affects the Odds of Equity Investing]( [How Time Horizon Affects the Odds of Equity Investing]( The reward for those who stand and wait. John Rekenthaler [3 Funds Whose Tax Bills Might Tick Up]( [3 Funds Whose Tax Bills Might Tick Up]( Tax season comes early for mutual funds. Russ Kinnel [2023 Has Investors Questioning All Sorts of Conventional Wisdom About the Market]( [2023 Has Investors Questioning All Sorts of Conventional Wisdom About the Market]( Stock and bond market performance during the past 18 months has challenged some time-tested investment advice. Dan Lefkovitz, Susan Dziubinski [How to Use Short-Term Bonds in a Portfolio]( [How to Use Short-Term Bonds in a Portfolio]( This edition of our Portfolio Basics series covers the value of short-term bonds in reducing risk and generating income. Amy Arnott [Going Into Earnings, Is Meta Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Meta Stock a Buy, a Sell, or Fairly Valued?]( We’ll be watching Meta’s commentary on AI and monetization across its platforms. Ali Mogharabi [Going Into Earnings, Is Alphabet Stock a Buy, Sell, or Fairly Valued?]( [Going Into Earnings, Is Alphabet Stock a Buy, Sell, or Fairly Valued?]( We’ll be closing watching ad revenue growth in search and YouTube, as well as cloud profitability. Ali Mogharabi [Going Into Earnings, Is Ford Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Ford Stock a Buy, a Sell, or Fairly Valued?]( With ongoing strikes, here’s what we’ll be watching for in Q3 earnings. David Whiston [Going Into Earnings, Is Tesla Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Tesla Stock a Buy, a Sell, or Fairly Valued?]( With likely lower profit margins, here’s what we’ll be looking for in Tesla’s earnings. Seth Goldstein [After Earnings, Is Charles Schwab Stock a Buy, a Sell, or Fairly Valued?]( [After Earnings, Is Charles Schwab Stock a Buy, a Sell, or Fairly Valued?]( With cash sorting among clients decreasing, here’s what we think of Schwab’s stock. Michael Wong [High TIPS Yields Are a Retiree’s Best Friend]( [High TIPS Yields Are a Retiree’s Best Friend]( A long-awaited investment opportunity has finally arrived. John Rekenthaler [Investors Are Flocking to These Active Value ETFs]( [Investors Are Flocking to These Active Value ETFs]( Even as value funds see record outflows, Capital Group, DFA, and others are drawing money. Katherine Lynch [5 Undervalued Stocks to Buy for a ‘Higher for Longer’ Interest-Rate Environment]( [5 Undervalued Stocks to Buy for a ‘Higher for Longer’ Interest-Rate Environment]( Plus, earnings this week and unpacking possible new bank regulations. David Sekera, Susan Dziubinski [Hang On to These Allocation Funds in Outflows]( [Hang On to These Allocation Funds in Outflows]( The funds’ assets are down, but their prospects aren’t. Greg Carlson [Jeffrey Kleintop: What to Make of ‘the Cardboard Box Recession’]( [Jeffrey Kleintop: What to Make of ‘the Cardboard Box Recession’]( Schwab’s chief global investment strategist on the Middle East Conflict, the state of the global economy, why bond yields are rising, and more. Christine Benz, Jeff Ptak [Our 10-Year Utilities Forecast: Renewable Energy to Triple by 2032]( [Our 10-Year Utilities Forecast: Renewable Energy to Triple by 2032]( Plus, our picks for undervalued utilities stocks. Travis Miller Chart of the Week [Unwrapping the ETF Wrapper]( [Unwrapping the ETF Wrapper]( Where the ETF structure shines and where it falls short. Zachary Evens [Read More]( Share: [facebook]( [twitter]( [linkedin]( Recent Earnings [Netflix: Stellar Results Show Durable Strengths but Also Some Tailwinds That Should Subside]( [Tesla: Price Cuts Weigh on Margins While Cybertruck Launch Officially Scheduled]( [Johnson & Johnson: Solid Results Lifted by Immunology and Oncology Drug Sales]( [Procter & Gamble: Sales and Margins Pop, but Competitive and Macro Headwinds Loom]( [Goldman Sachs: Removing Distractions for Potentially Strong Leverage to Market Recovery]( [Bank of America: Meeting Expectations, Net Interest Income Likely to Bottom Soon]( [U.S. Bancorp: Capital Building Process Accelerates, Profitability Outlook Dims Slightly]( [Truist Financial: Revenue Expectations Stabilizing, Expense Cuts Will Be Big Focus]( [Zions: Net Interest Income Is Stabilizing, Improving Profitability Visibility]( [M&T Bank: Deposit Costs Rise but Remain Manageable; Expense Guidance Creeps Up]( [ARM Holdings Stock: A Wide Moat, But We Think It’s Expensive]( [KeyCorp: 2024 Net Interest Income Growth Important to Our Thesis]( [Albemarle: Decision Not to Pursue Liontown Acquisition Is Value-Neutral]( [United Airlines: Cost Growth Portends Industry Drama as CEO Predicts a Shakeout]( [American Airlines: Higher Costs and Slower Revenue Growth Crimp Margins]( [BioNTech: Shares Remain Undervalued Despite Our Lower COVID-19 Vaccine Forecast]( [Nvidia: How Tighter U.S. Chip Restrictions May Affect the Business]( [AT&T: Improving Cash Flow Should Drive Solid Debt Reduction]( [Huntington: Net Interest Income Outlook Steady, Expenses Creeping Up]( Future-Proof Your Strategy With Morningstar Investor Build a portfolio that's durable, no matter what the market throws your way. 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