A big bull turns and runs

Until the American housing market stabilises - nothing else will. Unfortunately, says Merryn Somerset Webb, it's showing no signs of life. So what should you do now?

I interviewed Justin Urquhart Stewart of Seven Investment Management a few weeks ago. He's a sensible sort not too bearish, not too bullish. I asked what he thought was the key thing to watch for those hopeful of economic recovery. His answer? The American housing market.

Until that recovers, or at least stabilises, he says, nothing else will. So what's going on in the market? Listen to the bulls and you'd think the crash was all but over. Numbers out this week showed that new home sales rose 0.3% between March and April, enough to bring on mutterings all over the place about green shoots and bottoms. But this number, 0.3%, is a statistical irrelevance. It's not final it's an estimate from the US Census Bureau and the Department of Housing and Urban Development. And it comes with a margin of error of well over 10%. So when it's revised we could find that sales in fact fell, say, 12%.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.