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Investing Specialists

Morningstar Runs the Numbers

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended Oct. 6.

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Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

In the second installment of his series on the future of the Chinese economy, Dan Rohr looked at the sources behind declining productivity. 

The next 10 years will see each of the four conditions that aided the reform era’s outsize productivity gains approach exhaustion. Technological progress will decelerate as firms must innovate rather than imitate, urbanization will slow as the rural labor surplus is exhausted, returns on capital will deteriorate as overinvestment makes high-return projects ever scarcer, and the country’s demographic window of opportunity will close. Productivity growth is likely to slow from its recent pace of about 2.3%, dragging GDP growth down with it.

The 10-year Treasury ended the third quarter at 2.33%, only two basis points higher than where it was at the end of the second quarter. Sarah Bush looked at what that meant for bond fund returns.

Stable bond yields translated into modest gains for investors in investment-grade bonds. The Bloomberg Barclays U.S. Aggregate Bond Index finished the quarter with a 0.85% gain, while the intermediate-term bond Morningstar Category posted a 0.88% gain. Gains on low-yielding, short-term debt were the most muted, leaving funds in the various short-term bond categories as laggards for the quarter; the long-term government category also fell to near the bottom of the list following losses in September. Meanwhile, the quarter was generally rewarding for riskier funds, especially those with exposure to emerging-markets local-currency debt, which continued its strong run, and high-yield bonds.

Susan Dziubinski rounded up 30 stocks our equity analysts think look undervalued today.

September was a solid month for auto sales. David Whiston breaks down why in a video.

Automakers this week reported excellent September sales. They were up 6.3%, and there were a couple things going on that really helped. One, there was an extra selling day, so backing off that extra selling day, it was roughly a 2.2% increase, but also there's a rather significant bump from hurricane recovery. It's hard to say exactly how much, but the seasonally adjusted annually selling rate or SAAR came in at 18.58 million, which is absolutely outstanding. By far the best of the year, and in fact it was the best sense about 20.6 million in July of 2005, when the Detroit three were having a price war over employee pricing for consumers.

Charles Fishman thinks  Dominion Energy (D) can deliver 10% annual dividend growth over the next five years.

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