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Vaselkiv: U.S. Companies Will Overcome Europe Woes

Jason Stipp

Jason Stipp: I'm Jason Stipp for Morningstar. As the market continues to have some jitters based on what's happening over in Europe, and now more recently with the energy sector, we're checking in with some noted managers to get their outlook on the markets today and where they are finding opportunity.

I have the pleasure today of talking to Mark Vaselkiv. He is a Manager at T. Rowe Price High-Yield. Thanks so much for calling in today, Mark.

Mark Vaselkiv: Thank you, Jason. I'm looking forward to talking to you.

Stipp: First question for you. I wanted to start out in Europe. That's an area obviously a lot of people have been watching recently. It seems to be that when there is a hiccup in Europe now, the U.S. markets, for example, are responding pretty quickly, and in some cases, with quite a lot of severity on some days.

With the debt, particularly, there is a lot of concern about contagion and could this be "credit crisis part two," how serious is that risk of a credit crisis and how could it affect the U.S. markets?

Mark Vaselkiv: Jason, I actually was very fortunate in the last week of April to be traveling in Europe and visiting a number of my institutional clients. And as the week progressed, it was clear that there was a very significant issue developing.

At that time it was Greece, and now it has spread into other countries, and there was just a tremendous amount of anxiety about how the debt crisis would play out. And I think it really is, as you've mentioned, an extension of what began in 2008.

The world was affected dramatically by leverage and a lot of extreme debt, both in terms of individuals, corporations and now governments. So I sort of see this as maybe even the third part of the 2008 crisis.

And our expectation at T. Rowe Price is that, in general, the U.S. economy is showing very significant improvement and that is principally at the corporate level. We really like what we see in our companies. And our expectation is that over time the positive fundamentals of U.S. companies will overcome what's happening in Europe and countries like Greece and Portugal, et cetera.

We are focusing in our portfolio on many companies that don't have significant exposure to the European markets and the European economy. So I think that will help to a degree. But clearly, there are a lot of global businesses that we'll have to watch in terms of reducing profitability expectations if the Greek and other economies really slow down significantly.