Having dropped relatively sharply for the prior two trading sessions,
stocks looked ready to give up the ghost completely during the trading
day on Tuesday. Going into the final hour, the S&P 500 was down 1.5%
and threatening to break below 1,330. Just as things were getting
sloppy, stocks found their footing and reversed sharply. From 3:20 p.m.
to the close at 4:00 p.m. the S&P gained 10 points to close with a
run-of-the-mill 0.7% drop.
As usual, the Wall Street sewing circle had already pegged the catalyst: Jon Hilsenrath had struck again. The WSJ reporter and unofficial Fed mouthpiece was set to report that Bernanke and Co. were frustrated with the pace of the economic recovery and growing ever closer to another round of Quantitative Easing.
Cynics were quick to note the frequency with which such leaks occur, and Bernanke has all but made "I'm ready to stimulate" the official slogan of his tenure. The real questions are why traders keep buying into the same rumor and when, if ever, is this Pavlovian cause and effect going to cease. According to Todd Schoenberger of The BlackBay Group, traders just can't help themselves.
"Traders want QE3, 4, and 5 right now, because we know that earnings aren't going to support this market," says Schoenberger in the attached clip. "There's nothing else out there as far as a bullish catalyst."
But another round of quantitative easing isn't particularly bullish either, if it's actually deployed."QE1 and 2 was a failure, QE3 will be as well," he states.
Read more: http://finance.yahoo.com/blogs/breakout/fed-qe1-qe2-failed-qe3-says-schoenberger-141934376.html
As usual, the Wall Street sewing circle had already pegged the catalyst: Jon Hilsenrath had struck again. The WSJ reporter and unofficial Fed mouthpiece was set to report that Bernanke and Co. were frustrated with the pace of the economic recovery and growing ever closer to another round of Quantitative Easing.
Cynics were quick to note the frequency with which such leaks occur, and Bernanke has all but made "I'm ready to stimulate" the official slogan of his tenure. The real questions are why traders keep buying into the same rumor and when, if ever, is this Pavlovian cause and effect going to cease. According to Todd Schoenberger of The BlackBay Group, traders just can't help themselves.
"Traders want QE3, 4, and 5 right now, because we know that earnings aren't going to support this market," says Schoenberger in the attached clip. "There's nothing else out there as far as a bullish catalyst."
But another round of quantitative easing isn't particularly bullish either, if it's actually deployed."QE1 and 2 was a failure, QE3 will be as well," he states.
Read more: http://finance.yahoo.com/blogs/breakout/fed-qe1-qe2-failed-qe3-says-schoenberger-141934376.html
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