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With Summers Out, Yellen Becomes Fed Chair Frontrunner

  +Follow September 16, 2013 10:50AM
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While investors had already braced for some tapering of the $85 billion a month quantitative easing program, fears that QE would be reduced drastically were abated on Sept 16 when Larry Summers withdrew from his bid to become the new Federal Reserve Chairman. On the news of Summers’ withdraw, the Dow, the Treasury, and financials all rallied.

While Summers’ exact plans were he to become the Fed Chair were uncertain, investor perception was that he would aggressively curtail government stimulus at a much faster rate than current chair Ben Bernanke, who is set to step down in Jan. 2014.

With Summers out of the picture, current Vice Chair of the Board of Governors of the Federal Reserve Janet Yellen is now the clear frontrunner for the position. Yellen was a vocal proponent of government stimulus, and is widely expected to continue Bernanke’s programs more or less as he would have.

As opposed to the intellectual, liberal Yellen, Summers is much more hawkish and has a reputation as a wildcard prone to “outside-the-box thinking” which tends to make investors skittish.

The Fed is expected to meet on Sept 18, where it is believed they will announce they are scaling back quantitative easing. However, the market has already prepared for a tapering in the neighborhood of $10 to $15 billion a month, and that “the tapering is (already) widely discounted,” wrote strategists at KBC Bank in Brussels.

The markets, both domestically and internationally, rallied on the news of Summers’ withdraw and the presumptive maintaining of the status quo. US Treasuries were up significantly, and the Dow neared a new all time, rising over 150 points in early trading.

Investment banks Morgan Stanley (MS) and Goldman Sachs Group (GS) were both up on the day, as the majority of the financial sector rose with the good tidings. Morgan Stanley gained 2.4 percent to hit $28.81 a share. Goldman was up 2.07 percent to hit $167.40 a share.

 

(image of Larry Summers courtesy of WIkimedia Commons)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for ms
US Banking News
2 Oct 14 05:17:12
Morgan Stanley Coverage Initiated by Analysts at MKM Partners $MS http://t.co/C1y6sGXwDx
InterCooler
2 Oct 14 05:07:54
Morgan Stanley Research Coverage Started at MKM Partners $MS http://t.co/n7eHuNsI3f
Steve Young
2 Oct 14 04:56:23
#LA #VAhospital lacks basics, but spends $Ms on new furniture, TVs and #solarpower. #tcot #tpp http://t.co/dfWK3vowh5
Analyst Ratings
2 Oct 14 04:35:15
Morgan Stanley initiated by MKM Partners at buy. http://t.co/51H8MJSc1U $MS #MS
US Consumer News
2 Oct 14 04:34:58
Morgan Stanley initiated by MKM Partners at buy. http://t.co/jrXyxhjB3N $MS #MS
ZOZO
2 Oct 14 04:23:14
$MS Morgan Stanley initiated with a Buy at MKM Partners
Zonebourse News
2 Oct 14 03:05:12
IPSEN : Morgan Stanley entame le suivi à l'achat http://t.co/Nw8pfRGWM3 $MS
♔ارستقراطي راقي ♔
2 Oct 14 02:54:09
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Stock Moo
2 Oct 14 02:49:40
$ms: Dark pools draw trade away from stock exchanges in September http://t.co/AoA6gMmQkw
Stock Moo
2 Oct 14 02:49:40
$ms: Dark pools draw trade away from stock exchanges in September http://t.co/8XkX3Riwx8
Stockaholics
2 Oct 14 02:11:10
Subscribe to our Penny Stock Newsletter, for FREE! Major new picks coming: http://t.co/buedBpPSUK $MS $HART $LRDR
Zonebourse News
2 Oct 14 02:05:07
Ipsen : Morgan Stanley lance le suivi à "surpondérer" http://t.co/iGajnb86LK $MS
isomorphismes
2 Oct 14 00:16:15
ibid., 1996 Bayes' theorem is " $MS' secret weapon" #LATimes
Michael
2 Oct 14 00:10:31
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Mark Freeman
1 Oct 14 21:48:51
$GLD update: REPOST EVERYWHERE $TKMR $YHOO $BABA $HEB $AAPL $TSLA $SPY $QQQ $RIG $GLD $MSFT $MS "Mr. President close the affect countie
Stockaholics
1 Oct 14 21:21:06
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Lieff Cabraser
1 Oct 14 19:56:55
RT @YesProp46: MT @troyandalana @cmaphysicians DYK NY requires docs check state's Rx database,reducing doctor shopping 75% saving hundreds …
ExileonBaySt
1 Oct 14 19:34:22
Goldman chat room a message to Wall Street. $GS, $JPM, $MS http://t.co/8sWgVLd4za
Matt Genco
1 Oct 14 19:27:16
Morgan Stanley's Carla Harris on why perception matters in the workplace. #wallstreet $MS http://t.co/ZgFumzmcPH
Russell Ward
1 Oct 14 18:39:40
#Nomura, Goldman, JPMorgan among winners to manage #JapanPostIPO http://t.co/PWZpdlHxMt via @BloombergNews $GS $JPM $MS
Yes on Prop 46
1 Oct 14 18:30:17
MT @troyandalana @cmaphysicians DYK NY requires docs check state's Rx database,reducing doctor shopping 75% saving hundreds of $Ms #Prop46
Market Newswire
1 Oct 14 16:45:58
Will This Analyst Commentary Help Michael Kors (KORS) Stock? - http://t.co/OP7u4gTCGG $MS $KORS #stockmarket #stock #finance
Consestimate
1 Oct 14 16:22:35
MORGAN STANLEY: Here Are The 16 Best Stocks For Playing The American Shale Boom. $MS. http://t.co/FVdHX2cdX1
Auto Binary option
1 Oct 14 15:09:17
RT @ForTraders: Morgan Stanley : Striking the right note http://t.co/9n1G1iPWzR $MS
4-traders.com
1 Oct 14 15:00:03
Morgan Stanley : Striking the right note http://t.co/9n1G1iPWzR $MS
TALAOLP
1 Oct 14 14:50:51
RT @otiose94: #SpringSt: E-W special compensation #napthine http://t.co/WIB8SCkJ27 #10939 $Ms #abcNews24 #auspol oㄥO
Matt
1 Oct 14 14:45:18
#Buy $DNAX #DNA #Energy #Drinks #New #CEO #Real #Experience > $FNMA $HEMP $PMCM $PHOT $PLPL $CBIS $JPM $GS $MS $TSLA $FB $TWTR $GOOG $MSFT
Sir Plus
1 Oct 14 14:32:54
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Stockaholics
1 Oct 14 13:35:20
Subscribe to our Penny Stock Newsletter, for FREE! Major new picks coming: http://t.co/buedBpPSUK $MS $HART $LRDR
Bidness Etc
1 Oct 14 13:16:47
Fed Continues to Investigate Leveraged Loans http://t.co/7qKOQpbfui $BCS $JPM $MS $DB
NASDAQ
1 Oct 14 12:58:27
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/ZduRv8A39R
NASDAQ
1 Oct 14 12:58:25
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/gDAAcmmpo7
Solo traders
1 Oct 14 12:58:23
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/pHc5ceVWCQ
Solo traders
1 Oct 14 12:58:22
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/3oc6L7k1v8
Kristin
1 Oct 14 12:25:53
$ILMN got a touch of $MS pump on the day it topped.$LNKD time for you to revisit 200dma,no surprise on Q2,typical Mo,lower guidance & beat
Mark Rebel_1
1 Oct 14 12:23:56
@faithinmine @TheDailyEdge I live in community where homes are valued over $Ms. I love ppl except bigots like u.
Zonebourse News
1 Oct 14 12:15:04
Rocket Internet fixe son prix de son IPO à 42,50 euros http://t.co/P7vuTP2yxu $ZAL $MS $RKET
Zonebourse News
1 Oct 14 11:45:03
Rocket Internet fixe son prix de son IPO à 42,50 euros http://t.co/A5BpmG9IjZ $ZAL $MS $RKET
Jamie Pastore
1 Oct 14 10:51:01
RT @RudyHavenstein: Why doesn't the Fed just make the Eurozone a bank holding company? $GS $MS
Leni
1 Oct 14 10:50:12
$MS short b59.84 SHORT new position
Leni
1 Oct 14 10:48:40
$MS adding a bit more to this short
John Turner
1 Oct 14 10:00:56
$MS S&P 3K? Morgan Stanley Bullish on Rest of Decade http://t.co/sLZRiDGp0S
Jack Trader
1 Oct 14 10:00:55
$MS Morgan Stanley Doesn't Have Much To Worry About Even If Rosneft Deal ... http://t.co/aukmGuOt2t
Patrick
1 Oct 14 10:00:05
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Erik Knobl
1 Oct 14 09:33:28
RT @MorganStanley: Morgan Stanley Schedules Quarterly Investor Conference Call. Press release: http://t.co/LhlNQ6Ro3f $MS
Zonebourse News
1 Oct 14 09:05:09
BMW : Morgan Stanley a relevé sa recommandation. http://t.co/P5aWGpnwcF $MS
Kym L
1 Oct 14 09:02:07
$MS Monthly https://t.co/aZ8uQimbV0
Kym L
1 Oct 14 08:54:13
$MS Observation https://t.co/cTOdKVfumW via http://t.co/xwjHFVSbOf
Mike Domenic
1 Oct 14 08:50:51
$MS, Very nice daily H&S :)
Leni
1 Oct 14 08:48:12
$MS Short 33.99 new
				
				
  +Follow September 16, 2013 10:50AM
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