The major averages closed break even to slightly down on lower volume yesterday as some digestion of recent gains can be expected. Overall, the markets are behaving well considering the sharp rise off of the recent post-Brexit lows.
The market was expecting the Bank of England to cut interest rates for the first time in 7 years, but the central bank decided to keep rates at its current record low of 0.5% where it has stood since March 2009. The UK economy has been seeing an economic slowdown that has only worsened since Brexit.
Futures fell on the news but are still up over 0.6% as of this writing as it is believed the Bank of England will eventually cut rates. Since not now, then later.
The US will probably follow at some point with QE4 since the budget deficit remains near 10% of GDP. Meanwhile, Japan's debt stands at 200% of GDP, so the US has much room to maneuver. Further, Yellen has said she does not oppose negative rates.
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