Portfolio Manager Perspectives

Jeff Benjamin

ING's Uri Landesman: The easy money's been made; now the markets face a test

Oct 27, 2009 @ 10:57 am

By Jeff Benjamin

Investors will be paying close attention to the direction of the equity markets in the coming days in light of the recent market volatility that has tested the strength of the eight-month rally, according to Uri Landesman, head of global growth at ING Investment Management Americas.

Monday's stock market retreat brought the S&P 500 to its lowest point since Oct. 8 and down more than 2% over the last two trading sessions.

"The markets started nicely [Monday] and then turned on a dime following the health care and financial news coming out of Congress," Mr. Landesman said.

Mr. Landesman, who manages $1.7 billion in a large-cap-growth strategy for pension accounts, called the sudden market shift — in conjunction with a slight reversal in the strength of downward-trending U.S. dollar — "a little troubling."

He has set his sights on the 1,050 mark for the S&P 500 as a low-point threshold.

The index opened today at 1,067, up 18.2% from the start of the year and up 58% from the March 9 low.

"Given the steepness of the recovery, I'm not surprised by a pullback at this point," Mr. Landesman said. "I think the market could tolerate a test back to 1,050, and if we can hold there, I could see a breakthrough to 1,100."

Mr. Landesman remains skeptical about the rate of the economic recovery, which is why he is placing a lot of emphasis on the strength of corporate earnings that come out after the fourth quarter.

"The easy money has already been made. From here, we'll need to see not just a promise of better [corporate earnings] numbers but actual better revenues," he said.

"Right now, it's very much a game of expectations, versus what the actual numbers are."

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 .


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