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Quarter-End Insights

Industrials: Trade Tensions Lead to Attractive Valuations

Heavy equipment firms and industrial distributors look compelling as the market worries about sanctions and the prospect of a slowing economy.

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The Morningstar Global Industrials Index has dropped 17% quarter to date through Dec. 20 amid concern about trade sanctions (Exhibit 1), underperforming the broader global equity market, which lost 14% over the same interval.

Exhibit 1: Global industrials index fell, underperforming the global equity market

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