Investment Research Update

Third Quarter 2024

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Stock returns have tracked fundamentals this quarter.

Posted: 7/30/2024 by Denise Chisholm, Director of Quantitative Market Strategy

Potential for an earnings recovery and the long-term fundamental picture favored information technology. Consumer discretionary showed constructive contrarian indicators. Relative valuations favored financials. Conversely, earnings growth for consumer staples seemed likely to lag in a broader recovery. Looking ahead, the defensive characteristics of utilities could hinder its performance and problematic fundamental trends could offset the low valuations in health care.

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Third Quarter 2024 Investment Research Update Video

Denise Chisholm, Director of Quantitative Market Strategy, reviews some key points from Fidelity's Q3 Investment Research Update.

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  • Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
  • References to specific investment themes are for illustrative purposes only and should not be construed as recommendations or investment advice. Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
  • This piece may contain assumptions that are “forward-looking statements,” which are based on certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different from those described here.
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  • All indexes are unmanaged. You cannot invest directly in an index.
  • Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments.
  • Because of its narrow focus, sector investing tends to be more volatile than investments that diversify across many sectors and companies. Sector investing is also subject to the additional risks associated with its particular industry.
  • Sectors are defined as follows: Communication Services: companies that facilitate communication or provide access to entertainment content and other information through various types of media. Consumer Discretionary: companies that provide goods and services that people want but don’t necessarily need, such as televisions, cars, and sporting goods; these businesses tend to be the most sensitive to economic cycles. Consumer Staples: companies that provide goods and services that people use on a daily basis, like food, household products, and personal-care products; these businesses tend to be less sensitive to economic cycles. Energy: companies whose businesses are dominated by either of the following activities: the construction or provision of oil rigs, drilling equipment, or other energy-related services and equipment, including seismic data collection; or the exploration, production, marketing, refining, and/or transportation of oil and gas products, coal, and consumable fuels. Financials: companies involved in activities such as banking, consumer finance, investment banking and brokerage, asset management, and insurance and investments. Health Care: companies in two main industry groups: health care equipment suppliers and manufacturers, and providers of health care services; and companies involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products. Industrials: companies whose businesses manufacture and distribute capital goods, provide commercial services and supplies, or provide transportation services. Materials: companies that are engaged in a wide range of commodity-related manufacturing. Real Estate: companies in two main industry groups—real estate investment trusts (REITs), and real estate management and development companies. Technology: companies in technology software and services and technology hardware and equipment. Utilities: companies considered to be electric, gas, or water utilities, or companies that operate as independent producers and/or distributors of power.
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