Comments: Sung Won Sohn
Executive Vice Prsident, Wells Fargo
How do you expect the coming recovery to shape up, especially in terms of its strength and the sectors that will lead and lag behind? How have you factored in the uncertainties surrounding terrorist activity and the war?
See attached text and chart 6
The profits outlook is a crucial element in the recovery. What is your outlook for profits, and what factors will shape the profits recovery? Do your profit expectations square with those of investors?
S&P 500 profits will rise 25 to 35 percent in 2002. Reasons include economic rebound, the low base in 2001 and the FASB 134 dealing with a different treatment of goodwill amortization.
Also, see attached
Consumers will likely play a major role in the strength of the recovery. In the face of low savings, heavy debts, and sharply reduced wealth, how much can we expect households to contribute economic growth next year? And can we expect any contribution from housing?
Despite the rising jobless rate, real income has been trending up. The economic stimulus package from Washington and low energy costs will add to the buying power of consumers. In addition, consumer sentiment has risen for the third month in a row. Since inventories are very low, additional demand will mean productioan and jobs. Housing will continue to be an economic stabilizer.
Copyright 2001, Bloomberg L.P.
