John Eade – President of Argus research – discusses the strengths of the S&P 500, and why it would be absurd for the fed not to raise rates.
Positive outlook from US data
Following positive payroll and growth data, John Eade believes this will be a trend that will continue into the 3rd quarter after the Federal Reserve reveal their decision on the rate hike. Eade is confident of a hike occurring in September, particularly as he believes China’s currency devaluation will benefit US exports.
Better earnings reflects well on S&P 500
Following a particularly un-volatile year for the US index, Eade is pleased that the markets have held as this level, despite initially poor earnings data, and oil and china giving investors plenty of reason to exit the market. The expectation is that stronger data on earnings will bring in more equity investors, and Eade is optimistic for the S&P 500 to end the year strongly.