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Is the Stock Market Cheap Yet?


Published on 2025-03-20 14:41:21 - Morningstar
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  • US stocks are trading at a 5% discount to their fair values, according to Morningstar's analysis. The US stock market is looking moderately cheaper amid an ongoing selloff, trading at a 5% discount. Dramatic losses across mega-cap tech and artificial intelligence stocks are driving market-level valuations lower.

The article from Morningstar discusses whether the stock market is currently undervalued or "cheap." It highlights that despite recent market volatility, valuations remain high by historical standards. The S&P 500's forward price-to-earnings (P/E) ratio is above its long-term average, suggesting stocks are not cheap. However, there are nuances; sectors like energy and financials appear more reasonably priced compared to tech stocks, which continue to trade at elevated valuations. Morningstar's analysis suggests that while the overall market isn't a screaming buy, there are pockets of value for investors willing to look beyond the headline indices. The piece also touches on the impact of inflation, interest rates, and economic recovery on stock valuations, indicating that while some stocks might be overvalued, others present buying opportunities for long-term investors.

Read the Full Morningstar Article at:
[ https://www.morningstar.com/stocks/is-stock-market-cheap-yet ]