Washington in general — and President Barack Obama in particular — is getting in the way of the stock market rally, according to Uri Landesman, head of global growth at ING Investment Management Americas.
Mr. Landesman, who manages $1.7 billion in pension assets, cited Mr. Obama's decision to “attack the banks” as a “particularly ill-timed announcement.”
The reference was to the Obama administration's latest push to include more restrictions and taxes on big banks in financial services industry reforms.
Mr. Landesman said the Democrats' loss of the Massachusetts Senate seat formerly held by Ted Kennedy and the deadlock over health care legislation prompted the president to make a partisan decision to attack the banks. “Even [Senate Banking Committee Chairman] Christopher Dodd, whom I consider part of the problem, was critical of the president's move.”
The Obama administration's latest strategy for overhauling the banking system, combined with rumors that the Chinese government will try to cool down its economy, has led Mr. Landesman to lower his stock market outlook for the first three months of 2010.
The first-quarter estimate for the S&P 500, which he previously set at between 1,110 and 1,200, was lowered to between 1,040 and 1,140.
The index closed Wednesday at 1,097, down 1.6% from the start of the year.
“This is the first time in 10 months that I've ratcheted one of these ranges down,” Mr. Landesman said.
He still believes that the S&P 500 can finish the year with a “low-double-digit gain,” assuming that the Republican Party is able to win enough seats in the November mid-term elections to gain control of the House of Representatives.
“Investors see it as a huge negative that the Democrats have control of the House, the Senate and the White House,” he said. “What the markets want is nothing out of Washington.”
Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit
InvestmentNews.com/pmperspectives .
