In this week’s newsletter:
Friday’s Supreme Court ruling on tariffs capped off a relatively quiet week in the markets. For perhaps the first time in a while, there wasn’t a looming concern that artificial intelligence might disrupt business operations.
The court’s decision regarding former President Trump’s emergency rate hike was anticipated, yet the market’s reaction was muted. It was also expected that Trump would explore alternative ways to implement tariffs on imports. However, the level of his resistance might still catch some off guard. As Morningstar’s senior U.S. economist, Preston Caldwell, notes, the battle over these tariffs is far from settled. In fact, there are scenarios that could lead to even higher tariffs than what we saw prior to Friday. Meanwhile, Dave Sekera, Morningstar’s chief U.S. market strategist, discusses how investors might interpret tariff developments in the context of the stock market.
Beyond tariffs, attention is shifting away from the tech-heavy stocks that have dominated the market for the last three years. This week, we explored this transition in leadership. We examined the performance gap between tech stocks and recent top performers like energy and industrials. Sarah Hansen provided an in-depth look at several emerging leaders, identifying six stocks that are currently making waves.
Last week, we delved into the private credit market, where sentiment has turned decidedly negative. A significant update is Blue Owl, a key player in this arena, announcing it will halt redemption requests for its prominent funds, opting instead to gradually return capital to investors over an extended timeframe. Morningstar analysts believe this process could take several years. This news pushed Blue Owl’s already struggling stock even lower. Morningstar’s senior equity analyst, Gregory Warren, clarified why this situation serves as a warning for the entire industry.
As always, check our Markets page for the latest news, stock market updates, and a comprehensive weekly calendar of key upcoming data and events.
