View Full Version : Smithers Sees Earnings Worldwide Peaking, Undermining Stocks

07-10-06, 04:27 PM
Smithers Sees Earnings Worldwide Peaking, Undermining Stocks (http://www.bloomberg.com/apps/news?pid=20601109&sid=a1gsisxQofOQ&refer=)
July 10, 2006 (Bloomberg)

Andrew Smithers says investors are too complacent now that stock prices have stabilized after slumping in May and June. The outlook for the long haul, in his view: slowing economic growth, declining profits and sinking markets worldwide.

Economic growth and profit margins worldwide may come tumbling down with a thud, as central banks battle inflation with higher interest rates, said Smithers, chairman of Smithers & Co., a London firm that advises more than 100 clients on international asset allocation.

"The probability of this scenario occurring has so far largely been ignored by investors,'' said Smithers, 68, who spent 27 years at S.G. Warburg & Co., where he ran the investment- management business, before founding his firm in 1989. "A recession over the next two or three years is likely, and a marked decline in profit margins is virtually certain.''

AntiSpin: None required. This is consistent with our outlook.