Global stock market futures rose in a relief rally because the conflict between Israel and Iran had not spread further.
The Morning Filter: 5 Rallying Stocks to Buy in June While They’re Still Undervalued
A potential 18% tariff on imports could slash consumer cyclical stock valuations by over 20%, highlighting the need for defensive, wide-moat positioning.
Jun 16, 2025
40:39
Difficulty: Intermediate
Played
The Long View
The Morning Filter: 5 Rallying Stocks to Buy in June While They’re Still Undervalued
A potential 18% tariff on imports could slash consumer cyclical stock valuations by over 20%, highlighting the need for defensive, wide-moat positioning.
Jun 16, 2025
40:39
Difficulty: Intermediate
Played
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insights
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This episode
Cast
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Analyzed as a lagging gold miner with potential upside catalysts if Mali operations resume.
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Evaluated as a defensive cell tower REIT yielding 3.2%.
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Mentioned as a stock impacted by an Air India safety incident but still considered fundamentally sound by Morningstar.
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The US Federal Reserve's rate-cut probability and timeline were analyzed.
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Identified as an undervalued rallying agricultural stock yielding 3.5%.
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Analyzed following a sequential revenue beat and a $30 trim to its fair value estimate.
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Discussed as a photolithography semiconductor giant with strong artificial intelligence tailwinds.
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Highlighted as a patience stock trading at a 22% discount with stable 4.7% top-line growth.
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Discussed as a private equity buyout candidate by Apollo.
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Evaluated as a consumer travel bellwether and four-star stock.
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Analyzed post-earnings as premium-priced in the two-star category.
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Evaluated as an indicator of restaurant-level consumer behavior.
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Noted for its rapid 27% rally in less than a month, moving to a 3-star fair value.
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Discussed as a major homebuilder whose spring earnings and inventory indicate housing sector health.
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Discussed regarding DoD order reductions for F-35 fighter jets.
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Discussed alongside Israel regarding the military tensions impacting global markets and crude oil prices.
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Discussed in relation to the geopolitical tension and its impact on US market futures and global oil prices.
This episode
Claims & Sources
10 / 11 cited (91%)
Factual claims made this episode, and whether a source was named.
There is essentially zero probability embedded in market futures of a Federal Reserve rate cut in July 2025.
Morningstar's chief US economist forecasts a total of two interest rate cuts by the Federal Reserve before the end of 2025.
US housing starts are projected to decline by 3.5% in 2025 and another 1% in 2026.
Adobe's fourth consecutive quarter of revenue beat expectations and resulted in raised full-year guidance.
Under a worst-case tariff bear case scenario with long-term tariffs at 18%, consumer cyclical valuations would take a hit of over 20%.
A worst-case economic and tariff scenario would trigger a valuation hit of over 20% for the mining industry.
Regulated utilities and defensive sectors are historically less exposed to direct tariff impacts.
Fluor stock surged 27% in less than a month without any specific company-specific news catalyst.,
The current total quantity forecast of F-35 jets is 2,500 for the US and another 1,000 for allied militaries.
Nutrien's Canadian-produced potash and nitrogen products are exempt from US tariffs.
TL;DR
Geopolitical tensions, monetary policy shifts, and brewing tariff conflicts are injecting uncertainty into the US stock market, making a disciplined investment approach essential [1] — Dave Sekera "3+ Months of Inflation Data Required: The Federal Reserve and market analysts need several more months of CPI/PPI prints to accurately map …" 05:12 . In this episode, Morningstar's strategists break down how impending 18% trade tariffs could slash consumer cyclical stock valuations by over 20% [2] — Damian Conover "20%+ Consumer Cyclical Valuation Hit: Consumer cyclicals are deeply exposed because a high percentage of retail and apparel goods are manuf…" 26:58 , and identify defensive, wide-moat sectors like healthcare and utilities that offer reliable insulation [3] — Damian Conover "10% Delta Between Bear and Base Case: Under the base case, the worst-hit sectors like cyclicals see their valuation damage scale back to hi…" 30:44 . The episode highlights five undervalued, rallying stock picks—including Nutrien, Barrick Mining, American Tower, ASML, and Medtronic—that present strong fundamentals and robust margins of safety[4].
#Market Strategy
#Federal Reserve Policy
#Tariff Impact Analysis
#Equity Valuation
#Defense Spending
#Dividend Growth
#Semiconductor Equipment
#stocks
#investing
#tariffs
#valuation
#interest rates
#Fed
#earnings
#housing
#defense
#gold
#REIT
#semiconductors
Look closer
Every Monday, Susan Dziubinski sits down with Morningstar Chief US Market Strategist Dave Sekera to discuss one thing on his radar, one new piece of Morningstar research, and a few stock picks or pans. In this week's episode, Dave and Susan discuss the likelihood of Fed rate cuts, trade tariff scenarios, and 5 undervalued rallying stocks to watch.
- basis points
- A unit of measure for interest rates and other percentages in finance, equal to one one-hundredth of one percent (0.01%).
- disinflationary
- A general slowdown in the rate of price inflation over time.
- fiscal
- Pertaining to or involving a country's tax, public revenue, and debt management policies.
- idiosyncratic
- Relating to a concrete, distinctive business feature or risk unique to a specific company or asset, rather than the broader market.
- intrinsic valuation
- The foundational, true value of an asset based on its cash flows and business metrics, independent of its fluctuating market price.
- economic moat
- A company's sustainable competitive advantage that protects its market share and long-term profits from rivals.
- REIT (Real Estate Investment Trust)
- A company that owns, operates, or finances income-producing real estate across property sectors.
- photolithography
- The photographic process used in microfabrication to selectively pattern parts of a thin film on a semiconductor wafer.
