Attractive Yield Plays Now That The Fed Is Cutting Interest Rates
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 24 2024
0mins
Source: Barron's
Interest Rate Cuts and Bond Strategies: The Federal Reserve's recent aggressive interest rate cuts are prompting bond investors to adjust their portfolios, with a focus on shorter-duration Treasuries and quality corporate bonds to mitigate risks associated with rising long-term yields.
Dividend Stocks as Income Alternatives: Investors are increasingly turning to dividend-paying stocks for income, as they offer less exposure to interest-rate fluctuations compared to bonds, with several ETFs showing significant gains in the past three months.
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Analyst Views on MORN
Wall Street analysts forecast MORN stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 153.410
Low
250.00
Averages
285.00
High
320.00
Current: 153.410
Low
250.00
Averages
285.00
High
320.00
About MORN
Morningstar, Inc. is a provider of independent investment insights. The Company's segments include Morningstar Direct Platform, PitchBook, Morningstar Credit, Morningstar Wealth, and Morningstar Retirement. The Morningstar Direct Platform provides investors with data, research and insights, and investment analysis to empower investment decision-making. The PitchBook provides investors with access to data, research, analytics, and artificial intelligence (AI) enabled software across private capital markets, including venture capital, private equity, private credit, bank loans, and mergers & acquisitions (M&A). Morningstar Credit provides investors with credit ratings, research, data, and credit analytics solutions. Morningstar Wealth provides investment products, investor tools, and an advisor platform powered by research and data. The Morningstar Retirement offers products designed to help individuals reach retirement goals.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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See More
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- Valuation Concerns: While SpaceX's fundamentals remain unchanged, former Nasdaq CEO Bob Greifeld warned that the stock price is disconnected from its true value, primarily due to a restricted float and inclusion in major indexes like the Nasdaq-100.
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See More
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- Immigration Policy Changes: Post-Brexit, the UK has seen net emigration from EU countries, while immigration from non-EU states surged due to labor shortages and increased international students, presenting new challenges for the UK's immigration policy and affecting labor market dynamics.
- Pound Depreciation: Following the Brexit vote, the pound has depreciated by approximately 10% and has yet to recover to pre-referendum levels, leading to increased costs for imported goods and assets, which exacerbates the cost of living pressures for UK citizens, particularly in essential areas like food and energy.
- Divergent Stock Market Performance: The FTSE 100 has outperformed the domestically-focused FTSE 250 due to its global revenue exposure, yet the overall market performance has not kept pace with the gains seen in U.S. equity markets, highlighting the ongoing impact of Brexit on investor confidence.
See More
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- Anthropic Revenue Explosion: Anthropic's revenue run rate reached $14 billion by February 2026 and topped $47 billion by May 28, 2026, indicating robust market demand despite significant expenses that challenge profitability, with its valuation nearing $1 trillion.
- OpenAI's Success and Challenges: Following the launch of ChatGPT, OpenAI experienced rapid growth, generating $1 billion in quarterly revenue by the end of 2024 and $2 billion monthly by March 2026; however, it faced a staggering loss of $38.5 billion last year, highlighting the pressure of high expenditures on profitability.
- Investment Recommendations and Outlook: Currently, SpaceX is the only IPO stock available for investors, although a significant price pullback is anticipated once insiders can sell their shares; nonetheless, Anthropic's revenue growth and future prospects position it as the most anticipated IPO among the three.
See More
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- SpaceX IPO Performance: SpaceX successfully went public on June 12, 2026, with an IPO price that valued the company at approximately $1.8 trillion, which soared to $2.4 trillion shortly after, making it the sixth-largest company by market cap, reflecting strong investor confidence in its growth prospects.
- Anthropic Revenue Surge: Anthropic's revenue run rate reached $14 billion by February 2026 and topped $47 billion by May 2026, with a valuation nearing $1 trillion, indicating robust growth in the AI sector, although its significant infrastructure expenses remain a challenge.
- OpenAI Financial Status: OpenAI's ChatGPT rapidly gained 100 million active users post-launch, generating $2 billion in monthly revenue by March 2026; however, it reported a staggering loss of $38.5 billion last year, highlighting financial pressures amid rapid expansion.
- Market Outlook Analysis: While SpaceX is currently the only IPO stock available for investment, analysts caution that its valuation may be excessive, recommending that investors wait for a more attractive entry point, whereas Anthropic's upcoming IPO is viewed as a potentially more promising investment opportunity.
See More
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- IPO Capital Utilization: SpaceX has secured over $85 billion in fresh capital through its IPO, which will significantly support its future growth, particularly in capital-intensive areas such as rocket manufacturing and human lunar missions.
- Bond Issuance Plans: The company is reportedly targeting a $20 billion bond sale this summer, which will further bolster its capital strength and help maintain its competitive edge in the fiercely contested aerospace market.
- AI Investment Focus: According to the IPO prospectus, SpaceX's AI division is expected to be the primary beneficiary of the IPO funds, as AI accounts for over 90% of the company's claimed total addressable market, highlighting its critical role in future growth.
- Nuclear Energy Solutions: SpaceX may consider utilizing small modular reactors from NuScale Power to power its data centers, as this technology is theoretically faster and cheaper to deploy than traditional nuclear plants, potentially accelerating its energy sourcing diversification efforts.
See More
