KeyBank exec offers 2010 forecast: 'Recovery is upon us'

Last time, in 2001, Maine came out of a recession with new jobs in health care and home building.

This time, Bruce McCain said, think exports.

McCain, chief investment strategist for Key Private Bank and a regular on CNBC and Bloomberg TV, gave a 2010 forecast Tuesday morning at Fish Bones American Grill to a room full of current and prospective KeyBank clients.

The economy stopped shrinking in July, said McCain, who works out of the company's Cleveland office. "Recovery is upon us."

Expect a surge of short-term growth soon from all that pent-up spending, he said, followed by attempts to navigate rising inflation and interest rates.

Included in his forecast:

• Job losses will bottom out sometime between September and February.

• The stock market, in its current rally, still has room to grow.

• Business confidence is up. Companies may find themselves lean with inventory and staff, but "that gives them some room to expand."

• The value of the U.S. dollar will be under pressure.

• Overseas markets will be a good spot to invest. He's recommending that 30 percent of portfolios go into developed markets, 10 percent into emerging markets.

Answering questions from the audience, McCain said that with crude oil, over the next 24 months, "$120 to $130 a barrel is not out of line with what we'd expect to see if the global economy comes back online."

Using Portland data, he said it took that city 11 months to start growing after the last recession in 2001; the U.S. average was 33 months. Home building and health care jobs helped during that recovery, but, "the uncertainties about health care policy may limit some growth there" this time around, McCain said. He predicted new jobs will be found in export-related businesses.

kskelton@sunjournal.com