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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
FinSentS SP500
4 Mar 15 15:26:47
$MS:US Morgan Stanley to UBS Hedge for U.K. Vote in Asset Swaps #MORGAN STANLEY http://t.co/SO45UNvdWo #SP500
StockNewsWires
4 Mar 15 14:57:01
$MS $YHOO $GS: Etsy Files for U.S. Initial Public Offering of Craft Website: http://t.co/fq4dceOMIP
Capital Market Labs
4 Mar 15 14:56:40
$MS Revenue per Employee Trend #CML http://t.co/I9EfSkrngO
TurboResearch
4 Mar 15 14:32:03
RT @charlesmoscoe: $JIVE CEO @ $MS conference: Expanding $CSCO partnership to use JiveX in call center syncing capacity.
J
4 Mar 15 14:23:40
@pattotwit @LimMobTravel They are rank amateurs compared to the previous NSW Labor that stole $ms from corrupt deals.
US Banking News
4 Mar 15 14:22:37
Morgan Stanley Upgraded to Hold at Vetr Inc. $MS http://t.co/oAw2twFkwq
Sleek Money
4 Mar 15 14:20:33
Morgan Stanley Rating Increased to Hold at Vetr Inc. $MS http://t.co/UY0B7MoMFp
Media Sentiment
4 Mar 15 14:20:17
$MS received a new alert. Find out why at http://t.co/nZwqReM0tj #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 453
Charles Moscoe
4 Mar 15 14:19:18
$JIVE CEO @ $MS conference: Expanding $CSCO partnership to use JiveX in call center syncing capacity.
Analyst Ratings
4 Mar 15 14:15:52
Morgan Stanley upgraded by Vetr Inc. to hold. $37.20 PT. http://t.co/aN9fUFfXSd $MS #MS
US Consumer News
4 Mar 15 14:12:17
Morgan Stanley upgraded by Vetr Inc. to hold. $37.20 PT. http://t.co/2VYcz4jC0B $MS #MS
Geoff Garbacz
4 Mar 15 13:15:22
Part II: At today's $MS TMT Conference check out the pounding of these shares $WDAY $VEEV (ouch!!) many presenting post the close...timber!!
Brian Lobman
4 Mar 15 12:20:10
@KeithMcCullough $MS
Thudder & Wicks
4 Mar 15 11:47:17
Deals of the Day: $AVGO vied for $FSL, still seeking large deal, $MS, $TRW and more http://t.co/wqKSx0Lw3p http://t.co/pWZ2WoY1y4
Market Int Center
4 Mar 15 11:44:28
Morgan Stanley $MS Showing Support Near $35.28 ( http://t.co/Dtb9eJpnlo )
IntoOptions
4 Mar 15 11:29:34
$MS a good r/r here for EOD trade use $35 as a stop (I know a tight one).
Breaking News
4 Mar 15 11:22:03
$EBAY $MS $AXP $VM $PCLN $T $AAPL $GOOGL $HTSI: PayPal's Dan Schulman Suggests Partnerships Coming After Split: http://t.co/wCKDDq9q7I
Stock Trade Alerts
4 Mar 15 11:21:51
SHORT Seller Alert $MS - MORGAN STANLEY #ShortSeller #Stocks ~ via #AlertTrade
v2 Ratings Bot
4 Mar 15 11:14:33
$MS looks attractive (rated 7.4 as price is down to 35.20). Price vs ratings chart: http://t.co/nSyqt5ijZk
Penny Stock Secret
4 Mar 15 11:07:27
Yesterday We Made $89,000 In Just One Trade More Info Here http://t.co/NovWYe2RAx .. $MS $HART $LRDR
CFA Institute Events
4 Mar 15 11:03:24
Learn to thrive in the workplace & #StrategizetoWin with @CarlaAnnHarris of $MS this June http://t.co/GXA4K0hIMU http://t.co/rfj56JLWVF
Lauren Holmes
4 Mar 15 10:43:27
$GS or $MS which is your best bank? We like $MS due to asset management focus. Read our ideas here http://t.co/huaLsH8iDZ
Lauren Holmes
4 Mar 15 10:05:54
$GS or $MS which is your best bank? We like $MS due to asset management focus. Read our ideas here http://t.co/huaLsH8iDZ
StockNewsWires
4 Mar 15 09:52:02
$MS: Morgan Stanley Backs Off Italian Bond Stance With QE Days Away: http://t.co/WjhZr2RsTj
Al Sabogal
4 Mar 15 09:47:51
bot $MS July +34c/-40c call spread for 2.35
Lauren Holmes
4 Mar 15 09:35:08
Which is the best bank, $MS $C $JPM or $WFC? Check what we think here http://t.co/huaLsH8iDZ
BreakingStocksNews
4 Mar 15 09:32:01
$MS $GS $TGT: Rajan's Next Move on India Rates Divides Goldman, Morgan Stanley: http://t.co/iEaBqWWWB6
TMA Ohio
4 Mar 15 09:27:47
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
Kym L
4 Mar 15 08:59:06
Geez - what's wrong with $MS ?
NASDAQ
4 Mar 15 08:55:06
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/0ByWM2YHJg
NASDAQ
4 Mar 15 08:55:06
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/kiTv8y86bT
NASDAQ
4 Mar 15 08:55:05
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/xqImRzWE7u
Solo traders
4 Mar 15 08:55:05
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/LipCnpWQ8W
Solo traders
4 Mar 15 08:55:04
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/N6TRXpX7wG
Solo traders
4 Mar 15 08:55:04
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/FzlEeqVUcw
leahanne
4 Mar 15 08:44:45
Volume Alert - MS 35.15 Morgan Stanley $MS Hit a high today of 35.68 Closing the day 10:30 at 35.15 -0.67 -1.8 http://t.co/EiCEFwlFV9
Andrew Parish
4 Mar 15 08:44:42
@UBS uses recruiting 'bulldog' to land @MorganStanley duo in CA http://t.co/qh3LzPVoRN $UBS $MS
leahanne
4 Mar 15 08:44:24
$MS Volume Alert - MS Stock 35.15 Morgan Stanley $MS Hit a high today of 35.68 Closing the day 10:30 at 35.15 -0.6 http://t.co/tM6NEXAEsT
Breaking News Now
4 Mar 15 08:42:02
$MS $JPM: Morgan Stanley Buyback Estimates Cut in Half by JPMorgan Analyst: http://t.co/kMlCjZ0n7T
Jason Wood
4 Mar 15 08:38:33
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
Victor Lloyd Smith
4 Mar 15 08:22:48
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
Alpha Maven
4 Mar 15 08:18:30
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
AA
4 Mar 15 08:16:06
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
beto marcos
4 Mar 15 08:13:07
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
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4 Mar 15 08:12:11
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
Juanjo Montilla
4 Mar 15 08:10:34
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
stockmarketnow
4 Mar 15 08:10:30
RT MKTWgoldstein: All you need to know about the bank stress tests http://t.co/QaCju5oeIJ  $B $BAC $GS $JPM $MS $WFC
Holmes Unlimited
4 Mar 15 08:06:07
MarketWatch: RT MKTWgoldstein: All you need to know about the bank stress tests http://t.co/B1wW21Rbsp $B $BAC $GS $JPM $MS $WFC
Jinay
4 Mar 15 08:02:14
RT @MKTWgoldstein: All you need to know about the bank stress tests http://t.co/Pblv7geOfX $B $BAC $GS $JPM $MS $WFC
Capital Market Labs
4 Mar 15 08:01:33
$MS Earnings and Advertising Margin Trends #CML http://t.co/JRltQ0piBr
				
				
  +Follow September 16, 2013 10:50AM
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