NVDA - Moat Stocks React To Inflation And Slowing Growth
2024-05-09 11:10:00 ET
Summary
- April was a reset month for US equity markets, as investors digested persistent inflation data and declining GDP growth.
- The Morningstar Wide Moat Focus Index modestly lagged the S&P 500 Index in April, losing 4.96%.
- The Morningstar US Small-Mid Cap Moat Focus Index performed mostly in line with the Russell 2500 Index, representing the SMID cap market as a whole.
Inflation and slowing growth reset US equities in April. We explore the impact on moat stocks, and how Morningstar's adjustments to fair values and moat ratings are shaping expectations.
April was a reset month for US equity markets, as investors digested persistent inflation data and declining GDP growth. It was the first negative month of the year, from a total return perspective, pausing what had been a consistent upward trajectory for US stocks to start the year. What did not change was the influence of a select few companies on returns. While Alphabet and Tesla were two of the few companies to contribute positively to S&P 500 Index returns, several of the "Magnificent 7" stocks led the market lower. Microsoft ( MSFT ), Meta ( META ), Nvidia ( NVDA ), and Amazon ( AMZN ) were four of the top five negative contributors to S&P 500 Index returns in April. This dynamic continues to make things difficult for differentiated, high active share strategies. This is especially true for those that aren't typically focused on pockets of the market that have squeaked out success this year, such as energy stocks and subsets of the utilities and materials sectors....
Moat Stocks React To Inflation And Slowing Growth