Tags: Parker | investors | recession | earnings

Morgan Stanley's Parker: Investors Worried a Recession Coming

By    |   Tuesday, 11 February 2014 09:57 AM

Several recent pieces of weak economic data have investors worried that a recession may be coming, says Adam Parker, Morgan Stanley's chief equity strategist.

Perhaps the most significant signs of weakness have been the weak, though hardly recessionary, jobs reports of the past two months. Non-farm payrolls rose only 75,000 in December and 113,000 in January.

"What [investors] are more worried about is could there be a recession?" Parker tells CNBC. "Could the earnings collapse?"

Editor’s Note:
Secret ‘250% Calendar’ Exposed — Free Video

He predicts a 6 percent increase in earnings for the Standard & Poor's 500 Index in 2014.

Still, "I'm worried about everything," Parker explains. "That's my job. But to me, the highest priority of fear — the U.S. economy. Because once you start tapering, if you get a soft patch in the U.S. economy, it's hard to look you in the eye and say, 'Yeah, lower growth, lower liquidity. That's still fine.'"

But he expects the Fed to keep interest rates low for a long time, despite its tapering of bond purchases. "I don't really think it's panic time to be honest with you," Parker notes.

Research from Harvard economists Carmen Reinhart and Kenneth Rogoff shows that it takes 10 years for economies to fully heal from financial crises.

The good news: "financial crises do not last forever," Reinhart tells The Associated Press. "A decade is a long time. But a long time is not the same as forever."

Editor’s Note: Secret ‘250% Calendar’ Exposed — Free Video

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Several recent pieces of weak economic data have investors worried that a recession may be coming, says Adam Parker, Morgan Stanley's chief equity strategist.
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Tuesday, 11 February 2014 09:57 AM
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