Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > ETFs > Broad Market

MFS Strategist: 3 Factors Chill Economy

By Jim Connolly

X
Your article was successfully shared with the contacts you provided.

A change in 1 of 3 factors could save the U.S. economy from entering a recession.

James Swanson, chief investment strategist at MFS Investment Management, Boston, a unit of Sun Life Financial Inc., Toronto, gave that assessment during a recent economic forecast teleconference.

The 3 factors that could move the economy into recession are the price of oil, the decline in the housing market, and the current credit crunch, Swanson said.

The factor most likely to move in a helpful direction might be the price of oil, Swanson said.

The idea of the price of oil falling is plausible, because the market seems to be assuming that oil should sell for $80 per barrel, rather than $133 per barrel, Swanson said.

If, however, the price of oil stays high, the housing market remains weak, and the credit crunch continues, the U.S. economy will move into a recession, Swanson predicted.

Also during the teleconference:

- Swanson said short-term factors may help the dollar. But, in the medium-term, the dollar will drop 8% relative to the euro and 5% relative to the yen, he predicted.

The trade deficit, low interest rates and anemic U.S. growth rates will put pressure on the dollar, Swanson said.

- If the current bear market is true to historical trends, we may be 210 days into a 406-day bear market.

- Companies did not over-hire, over-spend or over-leverage during the recent expansion, and that and low inventories might help support a strong rebound, Swanson said.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.