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Economy Will Rebound in 2003, BMO Nesbitt Burns Predicts

Sherry Copper, chief economist at BMO Nesbitt Burns Economics, said in a recent report that economic growth in the U.S. should rebound with "potent stimulus coming from low interest rates and rising deficits," after revisiting recent lows in the fall.

Copper expects lows to be revisited in September or October. However, she anticipates good times ahead. "Barring a major geopolitical or terrorist shock, 2003 should be a much better year for stocks," Copper said. "Bond yields will likely edge higher in the government sector, but corporate spreads will begin to narrow. Stocks will outperform bonds next year."

She also noted that "surprisingly good earnings" would be the result of cost cutting and business rationalization and that "Corporate profitability is poised for a rebound, both year-over-year and quarter-over-quarter."