Why Investors Are Rushing to Safety

Plus: 6 undervalued defensive consumer stocks, why dividend-paying REITs are taking a beating and is economic pain coming? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=43596&elqTrackId=b1b30cd424604384a1f5e407e878a0eb&elq=f36e82d10a9844efa8213253205e8d1e&elqaid=43596&elqat=1&elqCampaignId=21018) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week's newsletter: - [Why Investors Are Rushing to Quality in the Bond Market]( - [6 Undervalued Consumer Defensive Stocks]( - [REITs Are Getting Caught Up in the Wave of Banking Fear]( - [Are We About to Feel the Economic Pain Powell Warned Would Be Coming?]( - [After the Latest Fed Rate Hike, More Questions Than Answers]( The [waves]( kept spreading this week. Even as the [Federal Reserve raised interest rates yet again]( concerns about the impact of the banking crisis on the economy have grown. As [we’ve said]( since the collapse of Silicon Valley Bank, banking crises aren’t really about the banks. Banks are a vital cog in the economy and when trouble hits them, the rest of the economy feels it. The critical question for investors right now is, How much of an impact will the banking crisis have? We tackled this question from several angles this week. We started with the overall state of the economy and the Fed. When the Fed last met at the tail end of January, it was laser-focused on fighting inflation. But this time around, the spotlight was on the potential impact of the banking crisis on the economy. As [Sandy Ward writes]( the question now facing investors is if the economic pain that Fed chair Jerome Powell predicted last year is about to become reality. In the bond market, at least, the opinion is “yes.” In our weekly markets recap, Lauren Solberg explains that bond investors have turned very cautious when it comes to bonds from riskier companies, and at the same time, they have rushed into the safety of high-quality bonds, such as U.S. Treasuries. This is an important shift in the markets, and [a story well worth checking out](. Another area of concern is commercial real estate, and in particular dividend-paying REITs. REIT stocks have taken a pounding in recent weeks, with office REITs losing 24% since March 8. [Jakir Hossain reports the worry is that office REITs]( will get squeezed by both tenants and lenders. As we said last week, it certainly feels like a good time to stay defensive in a portfolio. In our [weekly stock screen]( we looked for undervalued defensive consumer stocks and came up with six, including Kellogg and Mondelez International (which you may know best as the maker of [Oreo cookies](. Also this week, we’ve got a look at [three great value-stock ETFs]( and a close look at whether [Exxon stock is a buy for its dividend](. We'll have more coverage of the banking crisis and its impact on the economy and markets in the coming week. In the meantime, stay up to date by checking out the [Markets page]( on Morningstar.com. [Why Investors Are Rushing to Quality in the Bond Market]( [Why Investors Are Rushing to Quality in the Bond Market]( In the wake of the banking crisis, the highest-quality bonds have gained while low-quality bonds suffer. Lauren Solberg, Jakir Hossain [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Morningstar Specialists [6 Undervalued Consumer Defensive Stocks]( [6 Undervalued Consumer Defensive Stocks]( These wide-moat consumer defensive stocks are trading at discounted prices. Margaret Guidici [Are We About to Feel the Economic Pain Powell Warned Would Be Coming?]( [Are We About to Feel the Economic Pain Powell Warned Would Be Coming?]( Investors need to weigh the combination of a potential credit crunch and inflation fight on the economy and markets. Sandy Ward [Can Innovation Offset Biopharma Firms’ Losses From Patent Expiration?]( [Can Innovation Offset Biopharma Firms’ Losses From Patent Expiration?]( And how we expect the U.S. biopharma industry to react to new regulations on drug pricing. Damien Conover, Karen Andersen [Our Ultimate Stock-Pickers’ Top 10 Dividend-Yielding Stocks]( [Our Ultimate Stock-Pickers’ Top 10 Dividend-Yielding Stocks]( A majority of the top 10 dividend-yielding names are undervalued. Verushka Shetty, Eric Compton [Investors, Keep Close Watch on These Banking Crisis Ripples]( [Investors, Keep Close Watch on These Banking Crisis Ripples]( Morningstar's chief markets editor discusses what you should know about the latest Fed rate hike and investor outlook. [Is It Time to Short Jim Cramer?]( [Is It Time to Short Jim Cramer?]( These new ETFs are putting money where Jim Cramer’s mouth is—here’s why you should treat it as entertainment. Ruth Saldanha [Short-Seller Hindenburg Claims Block’s Cash App Is Built on Fraud]( [Short-Seller Hindenburg Claims Block’s Cash App Is Built on Fraud]( We find the evidence to be largely anecdotal, but the raised issues could prompt a regulatory response. Brett Horn [Jack Bogle Was Not Entirely Wrong About ETFs]( [Jack Bogle Was Not Entirely Wrong About ETFs]( While ETFs aren’t perfect, their virtues clearly outweigh their sins. John Rekenthaler [Fed Raises Rates, but Uncertainty Reigns Amid Banking Crisis]( [Fed Raises Rates, but Uncertainty Reigns Amid Banking Crisis]( A tightening of bank lending could tilt the balance on the economy and future rate hikes or cuts. Preston Caldwell [Which European Banks Are the Weakest Link?]( [Which European Banks Are the Weakest Link?]( Stress has returned the European banking system with Deutsch Bank and other stocks under pressure. Niklas Kammer Chart of the Week [The Games Funds Play]( [The Games Funds Play]( When “High Yield” funds are not. John Rekenthaler [Read More]( Share: [facebook]( [twitter]( [linkedin]( Popular This Week [5 Ways Investors Can Succeed by Knowing Their Limits]( You don’t know what you don’t know when investing. Jeffrey Ptak [2 Stocks Top Managers Are Selling]( These stocks were among the sales of several of our Ultimate Stock-Pickers last quarter. Susan Dziubinski [Real Luxury Goods Don’t Have Brand Names]( Peace of mind and simplicity have become much more important than outward shows of success. Christine Benz [Uncovering the Hidden Crypto Exposures in Your Investment Portfolio]( You may not realize these funds and stocks are exposed to digital assets. Manan Agarwal [The Best (and Easiest) Investment for an IRA]( Target-date funds are an easy remedy for IRA procrastinators. Here’s why. Christine Benz, Susan Dziubinski Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602