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.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.