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Wednesday, September 9, 2015

Don't expect the Fed to raise rates in September... QE4 on the cards?

John Eade, President of Argus Research, joined Nick Batsford on the Tip TV Finance Show to discuss the position of the Fed, and the overall situation concerning the US economy.

Short term trading dangerous in volatile conditions

Batsford outlined how day traders can only make a small fortune if they started with a large one, buying the dips and selling the rallies. This led Eade to note how the VIX index had tripled in the past few weeks in the US, leading to his conclusion that short term day trading is very dangerous to your portfolio health. He also added that looking to select high quality stocks is the best method in highly volatile markets.

US rates won’t rise in September, but in October? Or in December? The debate will continue

With the Fed meeting this week, Eade noted how US interest rates are unlikely to be hiked, but he is sure that the debate will once again continue and that October and December are both possible.

Last few weeks in September challenging for US

With the 3rd quarter results coming through towards the end of September, Eade outlined how the markets are likely to experience further volatility making the US a challenging market.

Outlook on the US economy

Batsford highlighted that with a slowing economy, a weaker US Dollar and questions over the S&P 500, leading him to question the US economy’s strength. However, Eade responded by outlining that the US is experiencing record levels of car sales, home prices that are still rising, unemployment down to 5.1% and the average US consumer has more money due to lower oil and gas prices. He concluded that all of this alongside the perfectly good non-farm payroll numbers means the US economy is still in a good position.

QE4 a possibility over a rate hike

To finish, Eade highlighted the distant possibility of QE mark 4 as a result of poor Q3 data at the end of this month matched with a bigger worry over deflation. He added that interest rates are likely to be hiked, but the inflation outlook does pose a slight threat.

Tip TV Finance is a live video show, broadcasted weekdays from 10 am sharp. Based in St Paul's, in the heart of the City of London, Tip TV prides itself on being able to attract the very best quality guests on the show to offer viewers informed, insightful and actionable infotainment.

The Tip TV Daily Finance Show covers all asset classes ranging from currencies (forex), equities, bonds, commodities, futures and options. Guests share their high conviction market opportunities, covering fundamental, technical, inter-market and quantitative analysis, with the aim of demystifying financial markets for viewers at home.

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