Nick Batsford, CEO of Tip TV, and Richard Hunter, Head of Equities at Hargreaves Lansdown (LONDON:HRGV), opened the Tip TV Finance show and discussed the indices, the rate hike situations as well as a look on inflation.
FTSE 100 overvalued, whilst US rate hike not to affect S&P 500
Richard Hunter commented on the FTSE 100, identifying that it currently lies very close to the position it was at the start of the year. Since we haven’t gone anywhere this year, it is clear the FSTE 100 is overvalued with the oil and mining sectors making up a fair proportion of that conclusion.
Batsford highlighted that the S&P 500 has had a lot chucked at it, and Hunter continued that when rates rise, by a very small amount in most probably September after good industrial production data on Friday, it is unlikely to be a significantly different situation with the S&P 500.
UK rates scenario
When concerning the UK rate hike, Hunter mentioned the 4.5% historical average for interest rates for the Bank of England, and outlined that it would be a long time before rates reach the average once again.
CPI data released in US and UK this week
Batsford noted Nicole Elliot, who outlined that the CPI data from the UK due tomorrow is expected to be 0%, whilst she commented that a raise in interest rates is needed before we see inflation. Hunter added that the MPC can buy itself more time with flat rates, and that it will be one or two years before the interest rate hikes are felt.