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By Andrew Gogerty | 06-09-2009 04:36 PM

How Sustainable Is the Recovery?

Although not anticipating huge gains, ICAP's Jerry Senser says some may be surprised at how good the economy and earnings may turn out to be.

Securities mentioned in this video
ICEUX MainStay Epoch International Choice I

Andrew Gogerty: Hi, I'm Andrew Gogerty with Morningstar, and joining me today is Jerry Senser, co-manager of the Mainstay ICAP International Fund. Jerry, thank you for joining me today.

Jerry Senser: My pleasure.

Gogerty: A lot has been written recently about the resurgence in the U.S. equity market. A lot of large-cap funds are back in the black, or positive returns for this year, and a lot of international, foreign large caps have really followed that lead. Your fund, for example, is back in positive territory this year. What do you think is driving some of that renewed optimism overseas in a lot of non-U.S. holdings?

Senser: I think the markets around the world are recognizing that the economy is probably going to start to recover by the end of the year. The global economy is going to start to recover, and the markets have reflected that fact. There are a number of factors that we look at that would underpin an economic recovery. We've seen an improvement in credit market conditions. Spreads in the credit markets have declined, and you've actually started to see companies being able to access public capital markets, for example for equity. Stress tests have been completed in the United States, an important milestone.

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