Guest Show from Asset.tv: US Outlook




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Video title: Guest Show from Asset.tv: US Outlook
Released on: June 12, 2009. © PharmaVentures Ltd
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This Show is presented courtesy of Asset.tv. (c) Asset.tv, 2009

Are the US economy and stock market on the road to recovery? Hear the views of:
Bob Doll, Global CIO of Equities, BlackRock
Tom Elliott, Global Strategist, JPMorgan Asset Management
Robert Sharps, Portfolio Manager, T.Rowe Price


Asset.tv has created the world’s largest online video library for investment professionals; working with over 200 of the biggest names in the world of finance, including: Allianz, Aviva, AXA, BNY Mellon, Fidelity, HSBC, JPMorgan, Schroders, Scottish Widows, T Rowe Price and Zurich.

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What are the signs of recovery in the US economy?
Mark Colegate:
Global financial economics crisis broke in the United States first but to see how far the US has come down the road to recovery I caught up with 3 experts they are Tom Elliott , Global Strategist of JPMorgan Asset Management. Bob Doll , Global CIO of Equities at BlackRock and Robert Sharps fund Manager and member of the US Large Capital Growth Team at T.Rowe Price. I began by Tom Elliott what signs of recovery we are showing in the US economy.
Tom Elliott :
The simple green sheets that a lots of people are looking at and include retail file data and housing data which I would only give the status of ambiguous to. I'm not convinced that both are actually turning positive and people are greeting, they're, there they're taking these green sheets and I think they've been adding the fact that we've had a short driven bad market that was then rapidly covered in early March and then throughout March bio investors stayed short of the market they have to cover to make some profit and by covering that buying of stock push the market up and then people look to these green sheets and said wow! we've got " we've got real investors buying for real economic reasons and I don't think that's the case.
Mark Colegate:
Well when do you think the US economic will recover and how strong will that recovery be?
Tom Elliott :
We are hoping it will be the end of this year, it might not be until of the game next year and when it does it will weak perhaps 1, 1.5% GP growth in 2010.
How is the US bond market these days ?
Mark Colegate:
Many of America's trouble started in the financial sector, so when I caught up with Bob Doll of BlackRock my first question is what signs are there of the financial sector is probably capitalized these days.
Bob Doll :
Well certainly relative to some people's expectations not that long ago not as badly as one might expect, now having said that it's clear that there are financial companies, banks in particular that need more capital. There is also a big question mark about the assets but it's still classified as performing some of them undoubtedly will turn to non-performing and that all require rate offs and therefore capital. So we are through the worst of it but there is more pain to come.
Mark Colegate:
And how healthy is the US consumers these days?
Bob Doll :
The US consumers has a broad, his and her savings rate up very significantly from nearly zero just before the Lehman Bank bankruptcy last September to the most recent statistics almost 5%, so on a short few months they was record increase still not to where it needs to go. 8% is our target so there is more reduction in consumption rate and rise in the savings rate in order to get to that healthy place. So our view as the US consumer is not dead but is still recuperating for from some pretty hard hits that we were taken last few months.
Mark Colegate:
What's the US bond market telling us about equities at the moment?
Bob Doll :
Well a couple of things, first the treasury market with yields backing up somewhat I think it's telling us the economy is through it's worst and that we are on firmer footing and therefore sending good news to the equity market. But you look at the corporate bond market we are also seeing in most cases spreads narrowing also a good sign. So backup in treasury rates, narrowing of credits spreads in the credit markets is coincident with a rise in equity prices.
Are there normal buyers and sellers of US equities?
Mark Colegate:
Finally I turn to Robert Sharps of T.Rowe Price in Baltimore and asked him are there normal buyers and sellers of US equities?
Robert Sharps:
Yeah I'm sure you have seen you know all of the data that suggest that retail or individual exposure to equities is quite low relative to where it's been certainly in past decades and that is a very large amount of money you know very conservatively invested and you know generating very low returns. So now that would suggest to me that there are many, many potentials buyers and you know and I think that you know the number of people of that, that are sellers you know kind of forced sellers have diminished certainly as a result of the cathartic event that took place in you know kind of the late September to you know again March of 2009 time frame. So I think many of the fore sellers are probably out of the market you know margin levels are down quite a bit terms for borrowing or much more restrictive and yet I think we still do have a number of investors both individual and institutional investors that are allocated very, very conservatively and are getting de minimis return.
Mark Colegate:
I'm Mark Colegate and until next time from all of us here at Asset TV goodbye.
Robert Sharps
Portfolio Manager
Bob Doll, vice chairman and global CIO of equities at BlackRock , accounting & economics (Lehigh University), MBA (Wharton), CFA, joined MLIM (now BlackRock ) in 1999 and occupied a number of roles, including co-head of Americas and global CIO, before assuming his current role of president and CIO. Before MLIM, Bob Doll was CIO at Oppenheimer Funds and from 1980 to 1987 was an analyst/fund manager at Citicorp. Tom Elliott has been with the company since 1995, and since 2001 has been a global strategist with responsibility for the monthly Investment Outlook and the quarterly Guide to the Markets products. Prior to joining JPMorgan Asset ManagementTom Elliott worked for four years at Grieg Middleton stockbrokers, and a year at Euromoney magazine as a features writer. He has an MSc from the LSE in Economic History. Robert Sharps is a member of T.Rowe Price U.S. Equity Steering Committee and lead portfolio manager for the firm's U.S. Large-Cap Growth Strategy. He has managed institutional portfolios and other accounts since joining the portfolio management team in 2000. He is a vice president of T.Rowe Price Group, Inc. Mr. Robert Sharps has 12 years of investment experience, 10 of which have been with T.Rowe Price. He started at the firm in 1997 as an analyst specializing in financial services stocks, including banks, asset managers, and securities brokers. He came to T.Rowe Price after an internship as an equity research analyst at Wellington Management. Mr. Rob Sharps began his career in 1993 at KPMG Peat Marwick, where he was a senior management consultant focusing on corporate transactions before leaving in 1995 to pursue an M.B.A. Mr. Robert Sharps graduated, summa cum laude, with a B.S. in accounting from Towson University and earned his M.B.A. in finance from the Wharton School of the University of Pennsylvania. He is accredited as a Chartered Financial Analyst and a Certified Public Accountant. He received a Sells Certificate for distinguished performance on the CPA exam in 1993.
BlackRock
BlackRock , Inc. is a publicly owned investment manager. The firm also provides risk management and advisory services. It provides its services to corporate, public, and Taft-Hartley pension plans, insurance companies, mutual funds, endowments, foundations, nuclear decommissioning trusts, banks, charities, corporations, official institutions, and individuals worldwide. The firm manages separate client-focused equity, fixed income, and balanced portfolios; open-end and closed-end funds; offshore funds; unit trusts; and alternative investment vehicles including hedge funds and structured funds. It invests in the public equity, fixed income, real estate, and alternative markets across the globe. The firm employs a fundamental analysis with a bottom-up approach to make its portfolio for investments. It employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. BlackRock was founded in 1988 and is based in New York. JPMorgan Asset Management JPMorgan Asset Management is no mutt. Tracing its roots to the 19th century, the business unit of JPMorgan Asset Management Chase combines the venerable investment management operations of JPMorgan Asset Management, Chase Manhattan, and Robert Fleming Holdings. (Chase Manhattan bought Robert Fleming Holdings in 2000, then merged with JPMorgan Asset Management the following year.) JPMorgan Asset Management serves investors around the globe, offering investments in stocks, fixed-income securities, real estate, private equity, hedge funds, mutual funds, foreign currencies, and money market instruments. T.Rowe Price Group, Inc. is a publicly owned holding investment manager. The firm provides its services to corporations, corporate, public, and Taft-Hartley retirement plans, foundations, and endowments. Through its subsidiaries it manages separate client-focused equity, fixed income, and balanced portfolios; common trusts, and institutional mutual funds. It also provides advisory services. The firm invests in the public equity and fixed income markets across the globe. It also invests in money markets. The firm conducts an in-house research to make its investments. T.Rowe PriceGroup was founded in 1937 and is based in Baltimore, Maryland with additional offices in London, United Kingdom; Central Hong Kong, Hong Kong; Tokyo, Japan; and Singapore.