The Morning Filter 5 Stocks to Buy Before Q2 Heats Up
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Mar 30, 2026 Dave Sekera, Morningstar Chief U.S. Market Strategist who provides market outlooks and stock analysis. He discusses whether Chewy’s surge is a buy, valuations and sector shifts heading into Q2, which sectors to harvest and where to redeploy proceeds. He also outlines Morningstar’s five undervalued stock picks for the start of the quarter.
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Growth and Tech Are Deeply Discounted
- Growth stocks now trade at a larger discount because both market selling and Morningstar raising fair values for some AI names widened the gap.
- Growth is at a 21% discount, and technology sector at a 23% discount—levels seen only rarely since 2011 and late‑2022.
Financials Lost Their Excess Premium
- Financials have rolled over after the market over‑extrapolated net interest income growth.
- The sector now trades at a modest 6% discount—only half the market's overall discount—so other sectors offer better value.
Lock In Profits From Energy Rally
- Harvest some gains in energy positions after a big rally instead of fully exiting.
- Use proceeds to buy areas hit hard this year—technology, AI, software—or to dollar-cost-average into those names.