Mellon Capital Report Also Sees Japan, Australia Escaping Recession
NEW YORK, April 10, 2012 — The U.S., Japan and Australia are expected to escape recession over the next 12 months, with the U.S. economy now expected to expand by 2.9 percent over the period, according to the Spring Outlook report from Mellon Capital Management Corporation, part of BNY Mellon Asset Management.
Excluding the U.S., Japan and Australia, most developed countries are expected to experience a mild recession over the next year, with European countries at the highest risk, the report said.
"The U.S. economy is continuing to strengthen and we now put the probability of anemic U.S. growth at less than five percent," said Lex Huberts, president of Mellon Capital. "This is a significant improvement from September, when the probability was closer to 20 percent that the U.S. economy would grow at less than two percent over the next year."
Mellon Capital generates its own proprietary measure of leading economic indicators (LEI), with an LEI level of slightly less than 100 indicating, in Mellon Capital's view, a significant probability of a mild economic contraction. All major developed countries except the U.S., Japan and Australia currently have readings below 100. Southern peripheral countries in Europe have the lowest LEI, but France, Great Britain and Germany also appear weak, all below 99, signaling the likelihood of at least a mild recession, according to the report.
"Looking at our forward estimates of economic fundamentals, we are cautiously optimistic on stocks given the signs of economic recovery in the U.S., positive steps toward resolving the euro area debt crisis and the general stabilization of earnings forecasts in Europe," said Huberts. "However, tensions with Iran are a concern."
The report also notes that Mellon Capital is moderately positive on commodities, favors emerging markets equities and favors the Australian dollar and Canadian dollar among developed market currencies at this time.
Gabriela Parcella, chief executive officer of Mellon Capital, said, "We are seeing growing interest in our global asset allocation and alternatives strategies as institutions increasingly recognize the opportunities for investing in the current economic environment."
Founded in 1983 by innovators in the investment management field, Mellon Capital Management Corporation applies a disciplined and analytical approach to global investment management strategies. As of December 31, 2011, the firm had $219.7 billion in assets under management, including assets managed by dual officers of Mellon Capital Management Corporation, The Bank of New York Mellon and The Dreyfus Corporation, and $8.5 billion in overlay strategies. Additional information about Mellon Capital is available at www.mcm.com. It is part of BNY Mellon Asset Management, one of the world's largest asset managers.
BNY Mellon Asset Management is one of the world's leading asset management organizations, encompassing BNY Mellon's affiliated investment management firms and global distribution companies. Information about BNY Mellon Asset Management can be found at www.bnymellonam.com.
BNY Mellon is a global financial services company focused on helping clients manage and service their financial assets, operating in 36 countries and serving more than 100 markets. BNY Mellon is a leading provider of financial services for institutions, corporations and high-net-worth individuals, offering superior investment management and investment services through a worldwide client-focused team. It has $25.8 trillion in assets under custody and administration and $1.26 trillion in assets under management, services $11.8 trillion in outstanding debt and processes global payments averaging $1.5 trillion per day. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com or follow us on Twitter@BNYMellon.
All information source BNY Mellon Asset Management as of December 31, 2011. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Asset Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. A BNY Mellon Company(SM)