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Big companies have also dramatically improved their balance sheets. S&P 500 companies have a
very manageable $100 billion of loans coming due this year and just $300 billion in 2017, Morgan
Stanley says. Nonfinancial companies in the S&P 1500 are also sitting on an incredible $1.7 trillion
in cash.
Related: Is this another 2008 for the stock market?
Citigroup: 65% of recession in 2016
Of course, there's no guarantee the U.S. economy will keep growing for the next four months, let
alone the next four years. The Atlanta Federal Reserve's GDPNow forecasting model thinks growth
in the fourth quarter of last year slowed to an anemic pace of just 0.8%.
Other Wall Street firms are more pessimistic than Morgan Stanley. Even before chaos erupted in
China, Citigroup warned last month there is a 65% of a U.S. recession in 2016.
In the longer term, the American economy is susceptible to unforeseen shocks. After all, few in 2006
thought the U.S. was about to enter its worst recession since the Great Depression.
Related: Brace for a 'rare' recession in corporate profits
If no recession, S&P 500 could soar 50%+
But if Morgan Stanley is right and the U.S. economy keeps growing until 2020, the current
expansion that began in mid-2009 would take the crown as the longest post-World War II expansion,
dethroning the one that took place between March 1991 and March 2001.
That would be very good news for the U.S. stock market, which is struggling to fight off another
China-fueled panic attack. If the economy keeps growing, Morgan Stanley thinks corporate profit
growth could lift the S&P 500 to 3,000 by 2020. That would represent a 56% surge from the index's
depressing close of 1,922.
CNNMoney (New York) First published January 11, 2016: 12:35 PM ET
http://money.cnn.com/2016/01/11/investing/longest-economic-recovery-ever/