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Mixed market numbers have economists concerned

Traders work on the floor of the New York Stock Exchange as concerns about the health of the American economy continue grow.

JEREMY HOBSON: And that's where we'll start with our morning analyst. Diane Swonk is off this morning but her deputy chief economist at Mesirow Financial, Adolfo Laurenti, joins us now from New York. Good morning.

ADOLFO LAURENTI: Good morning Jeremy.

HOBSON: Well, Adolfo, stocks are sort of mixed this morning, but the S&P 500 has been down for the last several days -- the longest losing streak since 2009. Do you think that should concern ordinary people or is it just investors being investors?

LAURENTI: Well, unfortunately economic activity have slowed down in recent weeks. We believe it's a variety of temporary factors, but they are having a very broad based impact -- things of the earthquake in Japan, the high level in the price of oil and gasoline, the bad weather. So all of this is weighing against the economic performance and is reflected in the downbeat mood on financial markets.

HOBSON: And you mentioned oil there. We heard from OPEC yesterday that they will not pump more oil and prices are above $100 a barrel this morning. Is that something that will keep us from getting out of the economic soft patch?

LAURENTI: It's a factor of risk. We can probably deal with oil prices at $100, but that really increases the risk that for any additional shock, the spike might be at a much higher level that would become a major challenge to our economic re-excellerations.

HOBSON: All right well, while we talk about challenges, I saw in this morning's Wall Street Journal that China's housing bubble is now potentially about to pop. If that happens, how does it play out in the U.S.?

LAURENTI: It's a risk factor actually. China does not only have the problem with the housing side. They are also having some excess of an investment in industrial capacity infrastructures. Inflation is rising over there. The major risk for the United States is that if something goes wrong in China they may stop buying our debt -- mostly our Treasury notes and T-bills. And that will immediately impact our interest rates. So we are in together with China. We're really hoping for a soft landing because our fiscal position doesn't not allow any mistake on that front.

HOBSON: All right, well before we let you go, with all this doom and gloom, is there anything that you think about economically to put a smile on your face?

LAURENTI: Well, you know I really need to work harder to find something, but there is something that gives me confidence. The balance sheet in corporate America is very good. I think the companies have their resources to invest in new equipment, machinery to do research and development and to hire new people. So if we can get just a break from the bad news, and regain some confidence, I think we might see some good surprises in the second half of the year.

HOBSON: Adolfo Laurenti, with Mesirow Financial, thanks so much for your time.

LAURENTI: Thank you.

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