US Fed Rate Cut: Nuvama Cautions Investors – Past Cuts Did Not Lead to Immediate Equity Boosts

Nuvama Cautions Investors

Nuvama Alternative & Quantitative Research cautioned investors that past Fed rate cuts did not lead to immediate equity boosts. The firm suggests that investors should not expect an immediate positive reaction in the equity markets due to the recent rate cut by the US Fed.

Reasons for Caution

Nuvama highlights that there have been 11 Fed rate cuts since 2000, excluding the recent one. Out of these, only four instances led to an immediate positive reaction in the equity markets. In the remaining seven instances, the equity markets either reacted negatively or remained range-bound.

Market Outlook

The firm believes that the recent rate cut by the US Fed is unlikely to lead to an immediate boost in equity markets. They advise investors to take a cautious approach and not expect a significant positive reaction in the short term.

Conclusion

Nuvama's analysis suggests that investors should not rely solely on Fed rate cuts as a signal for positive equity market performance. A comprehensive understanding of market dynamics and other macroeconomic factors is crucial for making informed investment decisions.