David Buik, Senior Market Commentator at Panmure Gordon and Marcus Ashworth, talk about the record highs in the US stock markets and whether the rally looks sustainable and weigh-on the necessity and effectiveness of an interest rate cut in the UK tomorrow.
Both guests seem to agree that the stock market rally in the US mainly represents falling Fed rate hike bets and little avenues left for investors given the bond yields are already at record lows. As per Ashworth, the stock market rally also represents growing double barreled (fiscal and monetary) stimulus expectations from Japan and increased hopes of fresh BOE stimulus.
On a possible interest rate cut by BOE tomorrow, Buik said, ‘it would be unwise of Carney to cut rates tomorrow, but he would most likely announce a cut’. Ashworth agreed with Buik and added further that a rate cut would be more of a symbolic move and unlikely to help the UK economy. Buik also talks about upcoming bank quarterly results and M&A activity. The segment was hosted by Tip TV’s Zak Mir and co-hosted by Mike Ingram, Strategist at BGC Partners.