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market news by nicholas ford
It’s sometimes easy to pick out the good news and look over the bad, or vice versa depending on which way your house view on the markets is pointing. Friday however did seem to be rather negative, on the economic, market and banks front:
GS performs U turn
Goldman Sachs has abruptly changed tack from its ultra bullish view of the world economy and swung into a bearish position, citing a weaker US economy and housing market and predicting these problems would spill over into other geographic regions. This is a big move from what many see as the world’s preeminent investment bank and surprised many.
Bolton predicts Bear market
Fidelity’s star manager Anthony Bolton is predicting that the UK is on the verge of a bear market, with a 3 to 9 month sell off before entering a new bull phase. Mr Bolton has a very respectable record in predicting cyclical market moves such as this. As we all know, markets tend to overshoot and undershoot fair value so this is not to say that gains will not be made in UK markets, just that the medium term view is looking weaker.
Netbank fails
US internet bank Netbank with £1.2bn was shut down on Friday by the US regulators, customers and insured deposits are being taken over by the Dutch bank ING. This is the first failure of a US bank since the end of the savings and loan fiasco in the early 1990’s.