NEW YORK The market upturn of the past eight weeks is a harbinger of the long-awaited, albeit modest, economic recovery and, believe it or not, a number of technology stocks are going to lead the way out.
That was the consensus of high-profile portfolio managers from firms including Gabelli Asset Management, Sanford C. Bernstein and Wellington Management, who spoke this morning at the Enterprise Group of Funds Economic and Investment Outlook Conference for 2003 and Beyond.
Gross domestic product (GDP) is headed for its fourth consecutive quarter of growth, averaging 3% a quarter, said Steve Irons, vice president at Wellington and portfolio manager of the Enterprise Deep Value Fund.
The economy will continue growing at 2.5%, predicted Dan Chung, chief investment office and director of research at Fred Alger Management. "The shallow recession should be followed by a shallow recovery," said Chung, manager of the Enterprise Technology Fund.
"We see a post-bubble, grinding kind of market . . . with more of these big trading swings," added Matthew Megargel, a senior vice president and partner with Wellington, who manages the Enterprise Managed Fund.
One of the more optimistic of the speakers, T. Kirkham Barneby, managing director, quantitative investments, UBS Global Asset Management, said earnings and dividend growth, short-term interest rates and market prices, have pushed "the equity/risk premium off the charts."
Sounding somewhat like a throwback to the days when many analysts and money managers quoted impressive Internet and technology forecasts, Chung and a number of his counterparts talked up tech. The number of broadband users in the U.S. has increased from 1.6 million in the beginning of 2000 to 20 million today, Chung said.
Meanwhile, while retail sales across the country on the day after Thanksgiving were up a little over 12%, various online retailers reported sales increases of between 40% and 60%, he noted.
Some of the technology stocks that the portfolio managers named include: AOL Time Warner, Cisco, Hewlett-Packard, Intel, Qualcomm, 3M and Microsoft.