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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (14805)	2/11/2002 11:05:50 AM
From: elmatador	Respond to of 74559

Experts More Optimistic U.S. economy is on a path to recovery Sun Feb 10,12:31 PM ET WASHINGTON (Reuters) - Forecasters are growing more confident that the U.S. economy is on a path to recovery from the recession that began last March, according to a survey released on Sunday. The February survey by the newsletter Blue Chip Economic Indicators showed more than 95 percent of economists expected the recession would be over by the end of March. That was an improvement on a January poll which showed 90 percent of economists saw the recession ending in March. In the latest survey, 42 percent of those polled thought the recession had already ended. Forecasts for gross domestic product growth in this year's first and second quarters were also revised upward. A consensus of 52 business economists has raised its 2002 growth expectation to 1.5%, from 1% just a month ago. Of them, more than 95% are confident that the recession will end by March, while 42% think the recession is already over. For the current first quarter, gross domestic product, or GDP, is now forecast to expand by 1.6%, up from 0.7% a month ago. First-quarter GDP was seen expanding by 1.6 percent in the February survey, up from January's projection of a 0.7 percent gain. The Blue Chip consensus looked for a GDP increase of 2.9 percent in the second quarter -- better than a January prediction of 2.6 percent. Blue Chip surveyed economists on their expectations for short-term interest rates in the coming year and the result indicated that most experts believe the Federal Reserve will be raising rates by the end of the year. The group forecast that overnight interest rates would hit 2.55 percent by the end of this year -- well above the current rate of 1.75 percent. In a separate question, the economists were asked who they thought would eventually replace Alan Greenspan as chairman of the Federal Reserve. The top pick was John Taylor, a monetary economist who is currently undersecretary for international affairs at the U.S. Treasury. More than 40 percent of economists named him as Greenspan's most likely successor. Runners-up included New York Fed President William McDonough, former U.S. Treasury Secretary Robert Rubin and Bush's economic adviser, Lawrence Lindsey. Greenspan, who took the helm of the Fed in 1987, is currently serving a fourth, four-year term that ends in June 2004.

To: Ilaine who wrote (14805)	2/11/2002 11:06:27 AM
From: elmatador	Respond to of 74559

If U.S. Smiles, Will Europe Beam? NYTimes February 10, 2002 The smart money over the last two years has shifted from the new economy to the old economy. This year, the right move may be from the New World to the Old World: the European market. To stock investors, the United States has been a more rewarding place than Europe for several years. Since the market lows in September, however, Europe has begun to close the gap, and many strategists in Europe and on Wall Street believe that European stocks will benefit more than domestic ones when the American economy rebounds from recession. "Our view is that Europe will outperform the U.S. this year," said Steve Tyson, head of global equities at AXA Investment Managers in London. In a recession, he said, European investors focus more on recovery across the Atlantic than on their own backyard, and as evidence mounts that economic growth is resuming in the United States, European stocks will benefit. "Europe tends to perform better than the U.S. in economic upturns, and it's starting from cheaper valuations," he said. In this view, however, the market in Europe will be risky if economic recovery in the United States is delayed. As trading during the last couple of weeks has shown, when the American market stumbles, the European market can suffer a humiliating defeat. Furthermore, there is little consensus about the sorts of stocks that will outpace the averages, even if the European market produces a sustainable rise. Read more: <http://www.nytimes.com/2002/02/10/business/yourmoney/10EURO.html?rd=hcmcp?p=042FaJ042Fb643fIa012000mjShNjSeg>