Global investment strategist
J.P. Morgan Fleming Asset Management
Assets under management: $584 billion
S&P 500: 1275
Hot asset style: Small-cap value
Stuart Schweitzer will be acting cautiously when it comes to stocks in 2002.
"We believe there is future downside risk for corporate profits," he said.
However, his warnings are tempered with optimism. Mr. Schweitzer is expecting both the Nasdaq and the S&P 500 to rise in 2002. The Nasdaq will begin to re-establish its footing because, although the index is "a little vulnerable," it will benefit from recoveries of international economies, which he also is expecting. The S&P 500 will get close to the 1300 mark by the end of the year, Mr. Schweitzer said.
The U.S. economy's recovery will begin in the spring, he said. "The cumulative impact of Fed policy (will have had) an impact by then."
The recovery, which "will be quite modest," also will be spurred by a drop in capital spending and the congressional passage of additional fiscal stimuli. The GDP growth rate will be 2% to 2.5% in the summer and 3% to 3.5% in the post-summer months, he said.
Mr. Schweitzer is expecting small-cap value stocks to perform best in 2002 as that is the sector with the highest returns in economic recoveries. He sees no indications the upcoming recovery will be any different. As a sector-neutral manager, he declined to say which sectors or individual stocks will be the top performers of 2002.