the bullish views of some market players as 'bordering on delusional'.
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 1:58am BST 15/04/2008
"Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.
Goldman Sachs said the key for equities will be the full-year guidance offered by companies
David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
"Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'....
Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as 'bordering on delusional'.
'The equity markets have not yet priced in a prolonged downturn in economic growth in my opinion. We are still in the early stages of the credit crunch. Earnings estimates for the second half of the year are likely still far too high,' he said."
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