DASH - Moat Stocks Await Rebound Following May Headwinds

2024-06-11 01:15:00 ET

Summary

• The Morningstar Wide Moat Focus Index faced challenges in May due to its equal-weighting, value stock bias and lack of mega-cap tech exposure. History may provide context for what comes next.
• US equities re-initiated their upward trend in May, with markets ending the month higher, but not without some volatility.
• Helping move markets higher was positive inflation data and quarterly earnings results.

The Morningstar Wide Moat Focus Index faced challenges in May due to its equal-weighting, value stock bias and lack of mega-cap tech exposure. History may provide context for what comes next.

US equities re-initiated their upward trend in May, with markets ending the month higher, but not without some volatility. To start the month, the three major US stock indices rallied from prior month declines and not only fully recovered from April drawdowns but went on to set new all-time highs by mid-May.

Helping move markets higher was positive inflation data and quarterly earnings results. However, ending the month was a divergence in performance between AI-tangential tech and nearly everything else. The Dow Jones Industrial Average slid over 4% from its new high water mark, giving up much of its gains to end the month up slightly, while the S&P 500 and Nasdaq finished May up a noteworthy 5% and 7%, respectively....

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