John Eade, President of Argus Research, joined Nick Batsford on the Tip TV Finance show to discuss the outlook for the US economy going forward including interest rates and the S&P 500.
S&P 500 down 50 points
Eade commented on the potential resignation of the House of Representatives speaker, and noted that this was a market over-reaction and it will all smooth out by the end of the year, with the S&P 500 moving higher.
US in a bear market?
Eade outlined that the release last week of US GDP growth came in at 3.9%, and he continued that a bear market in the US will be associated with economic recession, which he insisted as the growth in the US shows, we aren’t seeing at the moment.
Fair value in US markets
Eade highlighted that the market reached fair value about a year ago, but at the moment the US is below fair value. Eade believed there is 20-25% upside available in the current US bull market.
Yellen should step up and start hiking
Eade believed that the Fed think the US economy is in a decent position, but the uncertainty of the Fed is increasing the unnecessary uncertainty in markets. He concluded that the Fed and Yellen need to come forward and raise interest rates.
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