NEW YORK, March 24, 2009 (GLOBE NEWSWIRE) -- As the U.S. economic recession intensifies, the Obama administration's recently passed stimulus plan may help stabilize unemployment rates, the housing market and the financial systems, as well as promote growth in new investment areas such as energy efficiency, public infrastructure, and greenhouse gas mitigation through cap-and-trade structures, said leading finance experts at a panel discussion organized by Dow Jones Indexes/STOXX Limited.
Benefits of stimulus efforts in U.S. to be realized toward start of 2010
"The United States is experiencing the most severe economic downturn since the Great Depression, and conditions are expected to worsen before we start seeing signs of recovery. Globally, North America, Western Europe and Russia are also in recession, while the economies of Australia and parts of Eastern Europe, Africa and South America remain at risk. In the U.S., retail sales have fallen 10% from its peak, industrial production by 11%, house prices by 21%, and cumulative job losses are approaching 4.5 million. We believe that the stock market will bottom out shortly, home sales in the middle of the year, and house prices by the end of 2009. The jobless rate should peak halfway through 2010 at close to 10%. The current administration, however, has taken unprecedented actions to restart growth and help rebuild the economy and financial markets. Without the stimulus plan, the unemployment rate would reach 12% in 2011," said Gus Faucher, director of macroeconomics for Moody's Economy.com.
Infrastructure as investment opportunity poised for growth under current U.S. administration
"There is a renewed focus on infrastructure in the U.S. and also globally, with stimulus packages being rolled out in Canada, Europe, Australia, South America and China. While the current U.S. administration has allocated more than $50 billion of the stimulus plan to infrastructure projects, industry estimates indicated $2.2 trillion is required over the next five years to repair aging infrastructure in the U.S. Therefore, it will be the private sector that fills the gap," said Craig Noble, portfolio manager, Brookfield Redding LLC. "Having said that, the U.S. stimulus package contains a number of 'shovel ready' projects -- such as upgrading existing toll roads, which can start within months and which will therefore have an immediate impact on the economy. Longer-term projects that are also priorities of the Obama Administration, such as upgrading the electricity transmission grid, are well suited to private sector investment due to their longer-term investment horizons. This will translate into higher growth trends for the owners and operators of infrastructure assets."
President Obama's focus on energy and environment will generate employment, help companies better manage their energy costs, and help the economy maximize benefits of the cap-and-trade mechanism
Dr. Richard Sandor, chairman and chief executive officer of Chicago Climate Exchange, said: "The Obama administration has linked energy efficiency, climate change mitigation and cap-and-trade because together these items will generate needed employment, meet environmental challenges and stimulate exciting new technologies. This integrated approach is convergent with our belief that the benefits of regulated exchanges, such as those in the CCX family, that convey price transparency, price discovery, risk mitigation and standardization will be instrumental to the achievement of these important national goals."
Year-to-Date Performance of Key Indexes (as of 3/23/09) Dow Jones Industrial Average: -11.40% Dow Jones STOXX 50 Index: -14.32% Dow Jones Asian Titans 50 Index: -7.96% Global Dow: -9.51% Dow Jones Brookfield Global Infrastructure Index: -8.23% Dow Jones CCX Certified Emissions Reductions Index: -18.56% Dow Jones CCX European Union Allowances Index: -22.64%
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Disclaimer: Statements made by the speakers at this event, and summarized in this document, do not in any way reflect the opinion of Dow Jones Indexes, STOXX Ltd., Dow Jones & Co. or News Corporation.
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