U.S. will dodge 'double-dip' recession, says S&P

The United States will avoid a “double dip” recession, with real gross-domestic-product growth topping 2% next year, according to Standard & Poor's Corp.
DEC 21, 2009
By  Bloomberg
The United States will avoid a “double dip” recession, with real gross-domestic-product growth topping 2% next year, according to Standard & Poor's Corp. The research firm is estimating a 1.7% annualized growth rate in the fourth quarter, and a rate of 2.4% by the end of next year, Sam Stovall, S&P's chief investment strategist, said in a conference call today. The corporate earnings free-fall will end this year, and bottom lines should improve in 2010, Mr. Stovall said. While many observers have been worried about lackluster revenue growth, Standard & Poor's estimates 3% top-line growth this quarter, and an 8% revenue gain for U.S. public companies next year. Mr. Stovall said that cyclical stocks tend to outperform as the economy recovers from a recession, a pattern that “tends to hold into the second year of a recovery.” Standard & Poor's is recommending an overweight to consumer cyclical, energy, industrials and technology stocks. “Value tends to beat growth, and smaller-caps tend to trounce” larger-company stocks during a recovery, Mr. Stovall added. Standard & Poor's analysts are also recommending the Franklin Growth Fund (FKGRX), the T. Rowe Price Dividend Growth fund (PRDGX) and the Vanguard Selected Value Fund (VASVX). The funds rank highly under Standard & Poor's mutual-fund ranking system, and are focused on cyclical sectors.

Latest News

LPL adds $600M UBS team in Tennessee
LPL adds $600M UBS team in Tennessee

The firm's latest additions, led by a second-generation financial advisor, are striking out via its Linsco employee advisor channel.

eMoney supports focused financial planning with enhanced needs analysis
eMoney supports focused financial planning with enhanced needs analysis

The Fidelity-owned fintech aims to help advisors connect with mass market and mass affluent prospects with single-goal conversations.

Trump SEC pick Paul Atkins grilled by Democrats in early political test
Trump SEC pick Paul Atkins grilled by Democrats in early political test

The prospective chair of the agency has pledged to shed conflicted interests and "return common sense to the SEC."

Finra moves to boot Alpine Securities, same firm that claims the regulator can’t
Finra moves to boot Alpine Securities, same firm that claims the regulator can’t

'If I were on the side of Alpine Securities, I’d put all my eggs in the federal court,' one attorney said.

CFP Board floats new procedural rules around bankruptcy, misdemeanors
CFP Board floats new procedural rules around bankruptcy, misdemeanors

If approved, the proposed revisions would achieve outcomes similar to the existing process while reducing the burden of oversight.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve