Smart Investor: Stocks That Aren’t Worth Owning, Warsh Starts With a Bang, and Oil Price Outlook

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This week’s highlights:

It was a volatile week for stocks, as the Federal Reserve’s positioning for a possible interest rate hike later this year threw cold water on a rally sparked by the preliminary agreement to end the Iran war. Still, after a Wednesday slide and Thursday bounce, stocks ended the holiday-shortened week up 1%.

With the Iran war’s apparent conclusion, oil prices have fallen sharply over the past week. However, analysts are skeptical of whether we’ll see prewar prices–where players were focused on oil overproduction and not shortages–anytime soon. Karen Gilchrist spoke to analysts about their outlook for oil prices.

Meanwhile, Kevin Warsh led his first Fed meeting as chair. The decision not to change interest rates was not in doubt, but markets seemed surprised by signs that the Fed’s next move will be a hike. Here’s what analysts had to say about Warsh’s inaugural meeting, and why they think higher rates look more likely.

SpaceX stock continued to generate headlines this week. Early in the week, the stock briefly garnered a market cap larger than Amazon’s, even though SpaceX’s revenue last year was just 3% of the e-commerce and cloud company’s revenue. However, that burst faded, and by the week’s end, the stock had fallen back to being only massively overvalued instead of hyper-overvalued, according to Morningstar equity research.

Here at Morningstar, it was a busy week in Chicago with our annual Morningstar Investment Conference. As usual, it was chockablock with great panels, and you can find the highlights here. A personal favorite was Morningstar’s Robby Greengold’s conversation with Fidelity Contrafund manager Will Danoff, who is retiring after a 35-year career. We mined the conversation with Danoff–one of the last true star managers, to quote Greengold–for some of his investing pearls of wisdom.

Another MIC discussion happened between Morningstar Indexes Dan Lefkovitz and Hendrik Bessembinder of Arizona State University, who explained what investors can learn from 100 years of stock market history. Lefkovitz turned some of the data behind that conversation into an article this week, positing that most stocks are not worth owning. It’s a great read.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events.