Morningstar

Smart Investor: 3 Dividend Stocks To Watch, What’s Next for Stocks, and CPI on Deck

We wrap up our coverage of the markets and the week.

Eli Lilly and Company, Pharmaceutical company headquarters.
Cristina Arias/Cover via Getty

Want to stay informed with market insights and investing ideas from Morningstar? Sign up for my weekly Smart Investor newsletter here.

This week’s highlights:

Stocks are treading water again, having retreated a bit from recent record highs. The overall market gained more than 2% in the past week, led by the unlikely pairing of basic materials and tech stocks. (Basic materials had taken a tumble a week before, so no harm, no foul, it seems.)

Morningstar chief US market strategist Dave Sekera has words of caution for investors. He says that based on Morningstar’s metrics, stocks are largely fully valued and don’t offer much of a cushion of safety for potential bad news. That said, he sees opportunities for long-term investors. Check out his latest monthly outlook here.

Over at BlackRock, global chief investment strategist Wei Li has a somewhat different view. She’s more confident about the near-term outlook, but finds the longer-term picture muddier than usual. But she also sees ways to play the market. Check out Sarah Hansen’s article on what Li thinks is ahead.

In the background, it seems investors are largely ignoring the daily parade of headlines about big policy changes in Washington. Whether it’s the TACO trade or a belief that everything will work out in the end is unclear. The latest example was the news a week ago that President Trump was pushing pharma companies to lower drug prices. Aside from a short blip, stocks continued as before. But as Morningstar director of equity research Karen Andersen points out, drug stocks seem to be factoring in a lot of bad news.

After a very quiet week for economic data, the coming days will bring the next reading on inflation with the release of the July Consumer Price Index report. Expect more evidence of tariff-driven inflation. We’ll see how the White House responds if the data looks bad.

Lastly, Morningstar Dividend Investor editor David Harrell offers three dividend stocks he’s watching this month. They have an average yield of 4.5% and include two healthcare names and a utility.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates along with our fullweekly calendar of key upcoming data and events.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Sponsor Center