"Anybody who's anticipating a V-shaped recovery is going to be disappointed and they're going to be disappointed for a while," Stephen Wood, chief market strategist at Russell Investments, said Thursday.
The recovery rally that we have seen and signs that the global economy has begun to engage signal a "transition phase," Wood told CNBC. "We're transitioning from recession into growth, but it is going to be slow growth."
"Coming into 2010, we've got all these liquidity provisions, these massive balance sheet issues that have been taking place globally and I think right now what we are looking at is data and an economic recovery that's on government life support," he said.
"I don't think it's going to be brisk recovery in the United States," Woods said, adding that the path to recovery will be anemic and jobless.
"With a consumer who's not dead but damaged and with a government that's spending … going into 2010 (we'll see) modest, positive growth. But it's going to be a challenging environment," he said. The easy credit of 2006 is long gone, he added.
Wood sees China as the world leader in terms of "sequence and new growth."
New Set of Investing Ground Rules
For a corporate market perspective, we are transitioning from an "earnings story" to a "revenue story," he said. "The market is beginning to price in what the revenue numbers will look like. Not just earnings but revenue as we go into a growth that is very slow and tepid for the foreseeable future."
"We've kind of moved into a new set of ground rules for investing," Woods said. "As the Fed withdraws there's a lot of opportunity to assess the environment for 2010."
"The real interesting issue on a case-by-case, corporate name-by-corporate name basis is going to be as the Fed begins to withdraw two-by-two that life support that they are providing, what companies stand to benefit," he said.
Ahead of the September U.S. jobs report out on Friday, Wood predicted the numbers to come in "reasonably in line."