James Swanson, chief investment strategist at MFS Investment Management, said the global economic recovery is healthier than recoveries in the 1980s and 1990s because it’s not being driven by credit.
Companies have been “stockpiling cash,” and are in a better position to grow than in previous economic crises, said Swanson, speaking at an event in Santiago, Chile, organized by MFS. The greatest threat to the recovery, he said, is the rising price of oil and inflation.
“Corporate profits have now recaptured their previous peak,” Swanson said. “They’re a very strong fuel to keep the business cycle going.”
U.S. growth will accelerate in the second half of 2011 as companies increase spending and unemployment declines, Swanson said. He prefers stocks to bonds, adding that U.S. technology and health-care equities represent an “opportunity.”