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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
Winnetou Weinstein
21 Aug 14 00:32:02
RT @Bidnessetc: Apple closed up in the green on a positive Morgan Stanley report http://t.co/wml28hpWYP $AAPL $MS
4-traders.com
20 Aug 14 21:45:33
Centene : to Present at Morgan Stanley Global Healthcare Conference http://t.co/VL2ukID8io $CNC $MS
Meghan.T.Biro
20 Aug 14 21:41:00
RT @Bidnessetc: Apple closed up in the green on a positive Morgan Stanley report http://t.co/wml28hpWYP $AAPL $MS
Business Updates
20 Aug 14 21:34:08
$MS: Morgan Stanley Reaches Settlement On Overtime Pay Lawsuit http://t.co/PRG6fsvBRg http://t.co/vVzSBoL7TG
Bidness Etc
20 Aug 14 21:00:12
Apple closed up in the green on a positive Morgan Stanley report http://t.co/wml28hpWYP $AAPL $MS
Stockaholics
20 Aug 14 19:35:04
$GLBH closed up 150% today! Major Update: http://t.co/nHv4FnEmKE $MS $HART $LRDR
Jessica Martinez
20 Aug 14 17:14:26
RT @zeena4kids: 10 states drop PARCC testing since 2010 but Martinez spends $Ms on this. Gary King won't abuse tax $ on PARCC #GaryKing2014…
Bidness Etc
20 Aug 14 16:05:44
#GoldmanSachs Showers Blessings On Junior Bankers http://t.co/n0QZ7apnV9 $GS $MS
Bryan P. Jones
20 Aug 14 14:46:40
RT @CalConfidence: Morgan Stanley Says Go Long S&P 500, Short 10-Year Treasuries $MS http://t.co/8RQ8JNGdOH via @benzinga
jedimarkus
20 Aug 14 14:44:01
Morgan Stanley Says Go Long S&P 500, Short 10-Year Treasuries $MS http://t.co/mSCJ1BOddO via @benzinga
jedimarkus
20 Aug 14 14:43:45
RT @CalConfidence: Morgan Stanley Says Go Long S&P 500, Short 10-Year Treasuries $MS http://t.co/8RQ8JNGdOH via @benzinga
CalConfidence
20 Aug 14 14:42:38
Morgan Stanley Says Go Long S&P 500, Short 10-Year Treasuries $MS http://t.co/8RQ8JNGdOH via @benzinga
Business News Now
20 Aug 14 14:34:07
$MS: Morgan Stanley Presents Its 'Pollo Muertos' Case, And Now El Pollo Loco ... http://t.co/3qWEZvM42G http://t.co/ogWxXpGZ4R
Solo traders
20 Aug 14 14:13:28
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/T7zrWwV8FI
Adil Shaikh
20 Aug 14 13:39:05
RT @Bidnessetc: #Apple Tops $100 On #bullish Morgan Stanley Report http://t.co/BsXZITRKGQ $AAPL $MS
TP Strategic Partner
20 Aug 14 13:35:56
$MCP That sle was completed by a covered call write, hence the move from $5.50 to $2..... keeping their stock if possible. $MS for details
Louie
20 Aug 14 13:25:59
Massive $LNKD insider selling. What do they know? http://t.co/k0OfzJWl1E $PLUG $MS $JPM $UBS $CS $GS $AAPL $GOOG $FB $TWTR $TSLA $NFLX
Bidness Etc
20 Aug 14 13:24:30
#Apple Tops $100 On #bullish Morgan Stanley Report http://t.co/BsXZITRKGQ $AAPL $MS
Stockaholics
20 Aug 14 11:56:26
SKYF ran up as much as 300% Today! News Update: http://t.co/5A4Sg5sQA5 $MS $HART $LRDR
galgenjester
20 Aug 14 11:55:10
Looks like $MS will do the bulk of the heavy lifting and carry to support the lower bound.
Bulls vs Bears
20 Aug 14 10:34:17
$MS: Form 8.5 (EPT/RI) - Replacement Abbvie Inc http://t.co/WC6KCar7Rl http://t.co/QDbUuT9Ogu
TalkMarkets
20 Aug 14 10:17:11
"Worst. Recovery. Ever." Except For #Bankers $GS $MS http://t.co/q94os6wg3B
TP Strategic Partner
20 Aug 14 09:37:40
$MS $GS Both doing a stellar job. We're adding
No Sleep Capital
20 Aug 14 08:54:42
RT @PaulCiana: $GS raising analyst salaries in 2015 by 20%, $MS raising Jr Banker salaries by 25%. Is this bullish sentiment? @BloombergNew…
Paul Ciana
20 Aug 14 08:52:08
$GS raising analyst salaries in 2015 by 20%, $MS raising Jr Banker salaries by 25%. Is this bullish sentiment? @BloombergNews #stocks
Sheryl NussbaumBeach
20 Aug 14 08:30:02
RT @edconnectr: 12 PM ET How CEM supporter Crowdrise uses communities, contests & shoelaces to raise $Ms for good. http://t.co/fKVABycPY4 #…
Connected Educators
20 Aug 14 08:29:47
12 PM ET How CEM supporter Crowdrise uses communities, contests & shoelaces to raise $Ms for good. http://t.co/fKVABycPY4 #ce14 #edtech
Jeff Chmielewski
20 Aug 14 08:08:39
@hmeisler @DavidSchawel I remember when $MS raised our base salaries to compete for talent during the last tech bubble.
Leni
20 Aug 14 07:15:49
Note the strength in $JPM $MS Banks shaping up well
4-traders.com
20 Aug 14 06:55:02
Morgan Stanley : Argentina country risk edges higher on JP Morgan Index http://t.co/t7uldK3zsn $MS
Biz News Pioneer
20 Aug 14 06:34:12
$MS: Finra panel smacks Morgan Stanley with $4.5M arbitration award http://t.co/4jSR6XFxAq http://t.co/M3iWD8UWjw
4-traders.com
20 Aug 14 06:15:11
Morgan Stanley : Argentina country risk edges higher on JP Morgan Index http://t.co/LpscwqjHzc $MS
Media Sentiment
20 Aug 14 05:44:56
$MS received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 100
Market Int Center
20 Aug 14 05:43:24
Morgan Stanley $MS Showing Bullish Technicals With Resistance At $32.94 ( http://t.co/mlvuVQi90C )
Matt Genco
20 Aug 14 03:33:26
New research: As #solar economics continue to improve, there may be further reductions in government support. http://t.co/S1A6DOQPLW. $MS
Colin Waring
20 Aug 14 03:25:39
RT @PhillipChadwick: Not illegal but Is it ethical 2 accept political donations from providers that profit $Ms from govt funding #NSWpol ht…
Andreas Cseh
20 Aug 14 03:24:58
@MorganStanley $MS the BANKRUPT IB barely survived 2007 got the Public Relation Voice of #Apple what a JOKE $AAPL http://t.co/4PaP2h3AaQ
Solo traders
20 Aug 14 03:05:57
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/L2ydCoK983
NASDAQ
20 Aug 14 03:05:12
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/2HPhELNK15
Business Updates
20 Aug 14 02:34:13
$MS: Morgan Stanley dumps Potbelly http://t.co/IvU3OeZnX0 http://t.co/ON6Fqoulfv
joao
20 Aug 14 01:59:24
@finansakrobat how much is $ms up on the futures?
WKRB News
20 Aug 14 01:36:46
Morgan Stanley Sees Significant Decrease in Short Interest $MS http://t.co/A6fVLyZLzU
Bidness Etc
20 Aug 14 00:45:00
Morgan Stanley analysts are optimistic about Valero Energy’s future performance http://t.co/bov0e8AdRj $VLO $MS $MPC $PSX $VLP
Ken Jones
20 Aug 14 00:24:38
Jarndyce v Jarndyce? Anna Nicole Smith loses final bid to get $Ms from husband\'s estate - http://t.co/xi8jkAqb1K http://t.co/PC5Jq8RJgW
4-traders.com
19 Aug 14 22:25:03
MarketAxess Europe http://t.co/pm73zoNn1z $JUB $MS $HSBA
Melissa Thompson
19 Aug 14 20:30:32
RT @passthepuck: WSJ: Minerco, Level 5 Offer VitaminFIZZ(r) On http://t.co/HzMHyycjLw http://t.co/wTKx4PbtgF $MINE $S $T $DISH $MS $GOOG $H…
Pass the Puck
19 Aug 14 19:40:19
WSJ: Minerco, Level 5 Offer VitaminFIZZ(r) On http://t.co/HzMHyycjLw http://t.co/wTKx4PbtgF $MINE $S $T $DISH $MS $GOOG $HPQ $AMZN
Financial Updates
19 Aug 14 19:34:10
$MS: Midday Glance: Banks companies http://t.co/MA24j4Glil http://t.co/IDL76862G4
MND Victoria
19 Aug 14 19:25:56
@angelicaorganic @nolamjames can be true but in fairness $Ms raised in 3 wks which otherwise wouldn't have & that hlps ppl with #MND #ALS
Werner & Ursula
19 Aug 14 17:42:48
RT @PhillipChadwick: Not illegal but Is it ethical 2 accept political donations from providers that profit $Ms from govt funding #NSWpol ht…
				
				
  +Follow September 16, 2013 10:50AM
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