John Eade, President of Argus Research, joined Nick Batsford, CEO of Tip TV, on the Tip TV Finance Show to discuss the pace of Fed rate hikes into 2016, USD strength and the booming pharmaceutical and healthcare sectors in the US.
Timing crucial for the Federal Reserve
Eade commented that markets have been anticipating a US interest rate hike from early this year, but now the Fed has made it clear a December rate hike is likely. He continued that one or two more Fed hikes are likely throughout the Presidential election year, but there is nothing to worry about as interest rates will still be lower than historic levels. Eade finished by highlighting the issues in the global economy, including the China slowdown, as a reason for the gradual pace to be set by the Federal Reserve.
Any further USD strengthening will be slow paced
Eade noted that USD strength is a major worry for the US and global economy and has been for most of 2015. He expressed that industrial companies revenues are down due to the strong currency, which is up 12%. Eade finished by outlining that he doesn’t see the USD strengthening much more, but if it does increase the USD will rise slowly.
Largest healthcare merger of all-time?
Eade concluded his segment by believing that the US healthcare and pharmaceutical sectors are booming as a result of R&D, and now the companies involved are acquiring other firms within the sector to achieve bottom line growth. He added that the Pfizer Inc (L:PFZ)-Allergan Plc (N:AGN) merger could be one of the largest healthcare measures of all-time.