The U.S. economy’s expansionary cycle is played out and will soon end. We’re on the verge of another bubble market fueled by the central bank. The stock market correction of mid-October, along with the market making new highs, is an indication of trouble ahead in the equity markets, which are overpriced.

All of those sentiments are wrong. That’s what MFS officials emphasized at a year-end briefing on Tuesday in mid-Manhattan. They said both the stock market and the economy should do well next year.

“Those who say the Fed has inflated an equity bubble are not telling the whole story,” according to James Swanson, MFS's chief investment strategist.

“Valuations are not crazy. They are right in line with where they should be,” said Kevin Beatty, director of equity-North America for MFS.

Why?

The fundamentals of the American economy, added another MFS official, are improving, although it is easy to miss them.

“It’s slow. It’s steady. For some it is disappointingly slow. But clearly we are seeing the macro environment, as it relates to the U.S., is improving,” added William J. Adams, MFS director of fixed income.

Swanson told Financial Advisor magazine that he expects about 2 percent or more GDP growth next year. He adds that although the overall economy is growing at about a 2-percent-or-more pace, the private economy is growing at about 3 percent.

One reason that it is easy for some to misunderstand the economy, Swanson noted, is because wage growth continues to be slow. That’s even though many other economic indices are strong.

MFS officials said there are several reasons why the stock market is not overpriced and the economy is poised for more growth.

“The gains in profits and profit margins are showing encouraging signs of breadth, occurring simultaneously in nearly all sectors and industries -- including the much maligned health-care and technology sectors,” Swanson says. He added that the U.S. energy industry is another American success story.

Swanson also noted that the U.S. economy, alone among the major economies of the world, has continued to expand because the profit share of GDP has been and will continue to rise. Swanson noted that there has never been an expansion in which profits declined.

In part, this latest expansion is owing to improving U.S. manufacturing performance and lower labor costs, he said.

“The manufacturing segment of the U.S., for the first time in our lifetime, has risen. This is being driven by the fact that the U.S. is gaining market share against the Eurozone, Japan and, yes, even China,” Swanson noted. He also predicted that energy prices, in the short term, will not spike. And that, he added, will help American consumers buy more in 2015.

Swanson also argued that the economy, which was in part pushed into recessions in the 1980s and 1990s by stock market euphoria and too much credit, is not overheating or overdosing on debt. “I see no signs of that.”

So how long will the expansion, which began in 2009 and has lasted some five years, go on?

Swanson, noting that the average post-World War II recovery has lasted between five and 10 years, said this one still has a few years to go.

“I think,” Swanson says, “this cycle is a seven- or eight-year phenomenon.”