The US stock market started the year trading at a rarely seen premium over a composite of our valuations. Following the DeepSeek scare, AI stocks sold off rapidly with many trading well into bear market territory. After this sell-off, the market is now trading slightly below fair value. One of the hardest aspects of investing is separating signal from noise. Divining between news that identifies a paradigm shift that will either positively or negatively affect earnings (signal) versus news that garners a lot of attention yet will not meaningfully impact a company’s business (noise). As we head into the second quarter, it already feels like we have had a full year’s worth of headlines. From earnings and guidance, to the DeepSeek scare, to President Donald Trump’s on-again, off-again tariffs, volatility has risen anew. In this session, Morningstar’s Dave Sekera, CFA, Chief US Market Strategist, Preston Caldwell, Chief US Economist and Michael Field, Chief European Market Strategist review why we expect the economy will re-accelerate in the second half of 2025 and which areas in the market offer upside opportunities. Learn where we see undervalued opportunities to overweight, overvalued sectors & stocks to underweight, and how we expect the US economy will play out this year. Download the full report here: https://www.morningstar.com/lp/stock-market-outlook?utm_id=32018&utm_source=youtube&utm_medium=video&utm_campaign=res_gl_n_n_en_2504_tf_lc_n_outlookwebinar&utm_content=video_n 00:00 Introduction 01:25 US Equity Market Valuation Overview 13:19 Sector Valuations and Top Picks 18:02 Valuation by Economic Moat 20:06 Fixed-Income Outlook 21:23 US Economic Outlook and Tariffs 37:47 European Equity Market Valuation Overview 45:50 Audience Q&A