THOMAS W. JONES
Chairman and CEO
Citigroup Asset Management
Assets under management: $400 billion
GDP: up 3%
CPI: up 2% to 2.5%
S&P 500: 1235
MSCI EAFE: 1212 to 1235
Hot sectors: Healthcare, financial, industrials
Stock picks: Diageo, ENI, BHP-Billion, Eli Lilly
By the second half of the year, says Thomas Jones, the recession should end and recovery begin, with the United Kingdom and Europe leading the way.
The recession in Europe will be a bit milder than in the United States because European economies "were less extended at the end of the boom cycle and had not reached the same rates of growth as in the U.S."
In terms of equity performance, Mr. Jones expects the United Kingdom and Europe to have the strongest stock markets in 2002 because those markets didn't go to the same extremes as the U.S. market. His geographic market preference puts the U.K. stock market first, followed by Continental Europe, the United States, emerging markets, developed Asia and, last, Japan.
In emerging markets, he expects the Korean stock market to possibly outperform the U.S. market because "it has done the best job of working through adjustments from the last cycle."
Mr. Jones thinks healthcare-related sectors, including biotechnology and pharmaceuticals, will be very strong in 2002.