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What Investors Can Expect in 2021's Second Half

The market is currently trading at a 4% premium, but certain sectors are still undervalued.

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Susan Dziubinski: Hi, I'm Susan Dziubinski with Morningstar. Through the first half of 2021, the stock market notched double-digit gains, earnings growth was robust, and inflation heated up. What can investors expect for the second half of the year? Joining me today to share some insights is Dave Sekera. Dave is Morningstar's chief U.S. market strategist. Dave, let's dive right in. How do stocks look heading into the third quarter?

Dave Sekera: We've taken a look at the intrinsic valuations of all the stocks that we cover, and we put together a composite and then compare that to the overall market. So, right now, we think the market is trading at about a 4% premium over those valuations, which in my view, puts us probably at the top end of what we consider to be the fairly valued range.

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.