Strategist Sees 'Risk Appetite Recovery' Now

Several economic indicators point to signs that the economy may finally be moving out of the recession, but are they merely false hopes? Brian Bethune, U.S. economist at HIS Global Insight and James Sweeney, U.S. global strategist at Credit Suisse, shared their market insights with investors.

“This isn’t just a U.S. equity bull market, this is a very broad recovery in global risk assets that we’re seeing across the board,” Sweeney told CNBC.

“This is a risk appetite recovery—we’re seeing it very strongly in emerging markets, we’re seeing it in credit spreads globally and we’re seeing it in commodities.”

Sweeney said although the recovery is unlikely to reach the levels of economic activities in 2005, the growth data will get better in the near term.

“We’re going to have a fair bit more of [positive data] in the coming weeks and months and that should be supportive for a continued rally in risky assets,” he said.

More Market Optimism:

On the employment front, Sweeney said the labor market is going to get better in the next six months.

“The unemployment rate is going to peak out a little bit north of 10 percent at the beginning of next year and start to come down again,” he said.

In the meantime, Bethune sees the economy moving to a “trough,” and the recovery will not be as powerful as investors had hoped.

“Yes, there are indications now that for several consecutive months, indicators have been positive," he said. “We think the recovery will commence around September. However, the recovery will not be very strong and it may actually have some setbacks.”

The Skeptics Speak:


No immediate information was available for Bethune or Sweeney.

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