U.S. Economy Is Showing Signs of Recovery From Recession

NEW YORK (Jan. 16, 2003) — Global stock markets are expected to remain difficult in 2003 with a potential for deflation, according to leading market experts speaking at an event sponsored by Dow Jones Indexes and the New York Foreign Press Center.

Speakers at the event included: Michael Rothman, senior energy market specialist at Merrill Lynch; Kent L. Womack, finance professor at Tuck School of Business at Dartmouth College and Diane M. Garnick, global investment strategist at State Street Global Advisors.

Below are selected highlights from each of their remarks:

Finding Common Ground on an Oil Price Range

“We believe 1999 marked the start of a paradigm shift in the oil markets with the Group of Seven and Organization of Oil Exporting Countries having found common ground that an oil price range with $25 as a rough centerpoint was mutually acceptable,” says Michael Rothman, Senior Energy Market Specialist, Merrill Lynch.

Current Conflicts of Interest in Investment Banks Are Not Expected to Hinder Raising Global Capital

“Investment banks have certainly gotten themselves into a legal and political ’pickle’ over the disingenuous and blatantly overly optimistic recommendations they made in the ’go-go’ ’90s. While it will cost them serious dollars, it will not seriously affect global capital-raising. There is convincing evidence in both the U.S. and Europe that professional investors get what they need from analysts, whether the information is biased or not. They know the trick of how to ’de-bias’ it,” says Kent L. Womack, Finance Professor at Tuck School of Business at Dartmouth College. “What is unfortunate, and even a little silly, is that so much money will be thrown off of a tall building in the recent settlement that will cost a lot, provide very little incremental value, and set up a new series of perverse incentives.”

Confidence in Financial Markets Remains Low

“Although the U.S. economy is showing signs of recovering from recession, U.S. investors aren’t enthusiastic just yet about getting back into the stock market. Asia is expected to continue its recession while Europe seems to represent the best opportunities given the valuation level,” says Diane M. Garnick, global investment strategist, State Street Global Advisors.