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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
HotKeyTrading
28 Nov 14 15:30:06
Insiders Selling: $HRG $XOM $ENS $WSM $SBAC $RGLD $GPRO $PMCS $ABBV $TEX $MS $COVS $CTRL $AHT $EMN http://t.co/Vv2VEnpBuv #stockpicks #mkt
FinSentS SP500
28 Nov 14 15:15:19
$MS:US Morgan Stanley : lifts Great Wall Motor to HK$45 #MORGAN STANLEY http://t.co/4EXqhmWPX7 #SP500
NASDAQ
28 Nov 14 15:01:28
$MS - Chinese Social-App Group Momo Expects to Raise $256.6 Million in IPO http://t.co/EmotQYhC75
Solo traders
28 Nov 14 15:01:13
$MS - Chinese Social-App Group Momo Expects to Raise $256.6 Million in IPO http://t.co/k1NEStwU2i
4-traders.com
28 Nov 14 14:45:02
Chinese Social-App Group Momo Expects to Raise $256.6 Million in IPO http://t.co/6OSVuESkzK $BABA $WUBA $MS $STUS $E8O
Guido Clicque
28 Nov 14 14:13:47
RT @Uldis_Zelmenis: Nice chart from $MS kinda Oil "Cash Cost Set the Price Floor", just U R left to decide which Axis stands For What http:…
SA Krugerrand
28 Nov 14 14:10:03
RT @Uldis_Zelmenis: Nice chart from $MS kinda Oil "Cash Cost Set the Price Floor", just U R left to decide which Axis stands For What http:…
Uldis Zelmenis
28 Nov 14 14:03:48
Nice chart from $MS kinda Oil "Cash Cost Set the Price Floor", just U R left to decide which Axis stands For What http://t.co/pSbZ3jaB1e
Stockaholics
28 Nov 14 13:26:48
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $MS $HART $LRDR
ETFguide.com
28 Nov 14 12:52:51
RT @HalfFullPub: For the tycoon that has everything: The #WallStreet Coloring Book http://t.co/UJP7tIqWUR #OWS $GS $MS $C http://t.co/k1eG5…
Ron DeLegge
28 Nov 14 12:52:51
RT @HalfFullPub: For the tycoon that has everything: The #WallStreet Coloring Book http://t.co/UJP7tIqWUR #OWS $GS $MS $C http://t.co/k1eG5…
Half Full Publishing
28 Nov 14 12:52:31
For the tycoon that has everything: The #WallStreet Coloring Book http://t.co/UJP7tIqWUR #OWS $GS $MS $C http://t.co/k1eG5h3qGs
NASDAQ
28 Nov 14 12:20:04
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/aXKvV8ugY5
Solo traders
28 Nov 14 12:20:03
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/1cGJqYu2m0
Red Mitten
28 Nov 14 10:31:55
@FletJan @tersestuff i saw $100,000/day for police #burnabymountain so $135Mln frm BCGov buys KM 1350 days Less $Ms spent on TV ads #bcpoli
BlockTradeAlert
28 Nov 14 10:01:02
BLOCK TRADE: $MS 538,325 shares @ $35.18 [13:01:01]
Zonebourse News
28 Nov 14 09:15:03
CAC40 : tiré vers les sommets à 17H35, gagne +1% en hebdo. http://t.co/TAjQkyhX5Q $AF $MS $VK $ING $TEC $FP $CGG
Zonebourse News
28 Nov 14 08:45:03
CAC40 : tiré à la hausse en fin de parcours et +0,8% hebdo. http://t.co/SYpP3oUPPn $AF $MS $VK $ING $TEC $FP $CGG
Philly Style
28 Nov 14 08:28:13
RT @stocksecret101: Premium Alerts Ranked #1 For Gains 2834% Last Week http://t.co/SVqoMlijqL .. $MS $HART $LRDR
Penny Stock Secret
28 Nov 14 08:26:57
Premium Alerts Ranked #1 For Gains 2834% Last Week http://t.co/SVqoMlijqL .. $MS $HART $LRDR
4-traders.com
28 Nov 14 08:00:01
Factbox - Analysts' reactions on OPEC decision http://t.co/W9oiRWeVlV $GLE $MS $BNP $STAN $S0493 $EMRH $PDHO $BARC $4734
4-traders.com
28 Nov 14 07:15:05
MORGAN STANLEY : PLANS $100 MILLION INDIA INFRA FUND http://t.co/cLTDu6uAqH $MS
Analyst Ratings
28 Nov 14 07:14:22
Ctrip International was Downgraded to a Hold Rating at Morgan Stanley $CTRP $MS http://t.co/DWGK4AZ4uY
Lauren Holmes
28 Nov 14 07:12:45
$GS or $MS which is your best bank? We like $MS due to asset management focus. Read our ideas here http://t.co/VrsGMCgPOC
FinSentS SP500
28 Nov 14 07:10:40
$MS:US Morgan Stanley : lifts Great Wall Motor to HK$45 #MORGAN STANLEY http://t.co/Fx8K7HI1re #SP500
Zonebourse News
28 Nov 14 07:10:05
CAC40 : bloqué vers 4370, +0,5% hebdo et +6,2% en mensuel. http://t.co/zLxtyBV9VU $AF $MS $VK $ING $TEC $FP $CGG
Anthony DePaola
28 Nov 14 07:06:39
good to hear an unbiased sentiment from $MS, in regards to iphone 6 chip orders; finally looking at the #s
WKRB News
28 Nov 14 06:49:45
Morgan Stanley Director Laura D. Tyson Unloads 25,000 Shares $MS http://t.co/9jpG7PjKQc
Jon Vince
28 Nov 14 06:28:36
Well see if $NMBL continues comeback that started Fri. Positive comments last wk from $MS & #Barrona
Zonebourse News
28 Nov 14 05:50:05
CAC40 : résiste à 4370Pts, chute des cours du pétrole http://t.co/hzfj5zckBa $XBNT $AF $MS $VK $ING $FP $CGG
Miss A.
28 Nov 14 05:45:40
RT @hanna_hurley: Billionaires love children so much they are buying PublicEduc,fire tchrs,hire @TeachForAmerica & #ToxicTests 4 $Ms. http:…
Thomas Collins
28 Nov 14 05:30:46
$MS Morgan Stanley deferring more broker compensation in 2015 http://t.co/z9S1AFNOPS
Laurie
28 Nov 14 05:18:49
RT @hanna_hurley: Billionaires love children so much they are buying PublicEduc,fire tchrs,hire @TeachForAmerica & #ToxicTests 4 $Ms. http:…
Keubiko
28 Nov 14 04:58:58
RT @JSiegel88: $MS: Mkt has lost "#OPEC Put. " If strat turn perm., then oil will b subject to px swings like any other comm'y. Expect mu…
Mindy Rosier
28 Nov 14 04:58:04
RT @hanna_hurley: Billionaires love children so much they are buying PublicEduc,fire tchrs,hire @TeachForAmerica & #ToxicTests 4 $Ms. http:…
4-traders.com
28 Nov 14 04:50:02
Factbox - Analyst reactions on OPEC decision http://t.co/O3Tvi7ohVH $GLE $MS $STAN $BARC $PDHO $EMRH $4734
Jay Siegel
28 Nov 14 04:33:51
$MS: Mkt has lost "#OPEC Put. " If strat turn perm., then oil will b subject to px swings like any other comm'y. Expect much higher vol
HotKeyTrading
28 Nov 14 03:30:05
Insiders Selling: $ENS $WSM $SBAC $RGLD $GPRO $PMCS $ABBV $TEX $MS $COVS $CTRL $AHT $EMN $CXW $COP http://t.co/TRx9EnjwT5 #daytrader #stock
Zonebourse News
28 Nov 14 03:30:02
Le CAC 40 se replie de 0,5%, affecté par la baisse des valeurs pétrolières http://t.co/WB6zz1aadF $AF $MS $MAU $VK $ING $GBB $TEC $FP
NASDAQ
28 Nov 14 03:13:14
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/XVsCFLW0Ao
NASDAQ
28 Nov 14 03:13:13
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/iVWp9CpNvM
NASDAQ
28 Nov 14 03:13:12
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/xN3jjZVOjC
NASDAQ
28 Nov 14 03:13:11
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/MGMNt8SFTw
NASDAQ
28 Nov 14 03:13:09
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/U1Zn6OhaIc
Solo traders
28 Nov 14 03:13:08
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/BHIn7yKvUg
Solo traders
28 Nov 14 03:13:07
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/QuCabTAZHf
Solo traders
28 Nov 14 03:13:06
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/LRmFko4WOY
Solo traders
28 Nov 14 03:13:04
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/Xa7KdSWvQ8
Solo traders
28 Nov 14 03:13:03
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/oQix9R1dQe
Zonebourse News
28 Nov 14 03:10:03
Le point sur les changements de recommandations à Paris http://t.co/JdKqFfRGqz $ING $BIM $BOL $RMS $RCO $FP $MS $CC
				
				
  +Follow September 16, 2013 10:50AM
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