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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
Adam
2 Sep 14 06:51:58
RT @ianestepan: $MS says that the $REGN data was expected and already priced in - CV outcomes is a class effect
RCV
2 Sep 14 06:47:55
@sallyshin @SquawkStreet @TheChartress @TheBubbleBubble $SPX 3,000 call by $MS. Is this like the Blodget call on $AMZN?
Ian Estepan
2 Sep 14 06:35:42
$MS says that the $REGN data was expected and already priced in - CV outcomes is a class effect
Wall Street News
2 Sep 14 06:34:26
$MS: UPDATE: Morgan Stanley Reiterates On Avago Technologies Ltd. On Positive Outlook http://t.co/XEcQD8XzlO http://t.co/NmddpNbR5O
DontTakeLosses
2 Sep 14 06:25:44
$MS 5 year TP on $SPX 3k baby
RT
2 Sep 14 06:13:02
RT @DeidreZune: Just to make sure we get the fall started on right foot $MS sets $SPX target of 3000 in 5 years http://t.co/fjS0zeyyUz $A…
DeidreZune
2 Sep 14 06:09:27
Just to make sure we get the fall started on right foot $MS sets $SPX target of 3000 in 5 years http://t.co/fjS0zeyyUz $AAPL $TWTR $GPRO
TakingStock614
2 Sep 14 06:08:05
+$SPX 2005-2010 before some type of short trade sets up. This morning $MS makes bold stmt $SPX to 3000. Certainly chasers will not want+
renato gerena
2 Sep 14 06:04:05
RT @madmoneyfund: S&P500 #Stocks Performance $X $MS $REGN $GILD $CHK $LM $PEP $C $CELG $GS $LNC $CAM $JPM $SCHW $STT $PXD
DontTakeLosses
2 Sep 14 05:58:54
$CENX popper upgrade by $MS
Business News Watch
2 Sep 14 05:34:19
$MS: Early Glance: Banks companies http://t.co/4eYdtIMGYs http://t.co/DoDBuwJLR6
Jeffrey Blake
2 Sep 14 05:30:37
$MS MORGAN STANLEY: The Market Could Rally For Years, And The S&P Might Go ... http://t.co/1tMRVpgMkP
Carri Degenhardt
2 Sep 14 05:20:22
Rumor of @MorganStanley layoffs comes in 1st for August http://t.co/kKrR7BDkAr $MS #RumorHUB
Robert Graham
2 Sep 14 05:15:25
Rumor of @MorganStanley layoffs comes in 1st for August http://t.co/UTYPVnDkzX $MS #RumorHUB
Andrew Parish
2 Sep 14 05:10:22
Rumor of @MorganStanley layoffs comes in 1st for August http://t.co/rHqf1XJXo5 $MS #RumorHUB
AdvisorHub
2 Sep 14 05:05:13
Rumor of @MorganStanley layoffs comes in 1st for August http://t.co/m4ze469bKK $MS #RumorHUB
AdvisorHUB Rumors
2 Sep 14 05:00:59
Rumor of @MorganStanley layoffs comes in 1st for August http://t.co/2Sp2zeHNsJ $MS #RumorHUB
Bulls vs Bears
2 Sep 14 04:34:25
$MS: Diamond's Atlas Mara Backed by Trafigura, Morgan Stanley http://t.co/7JbvUKy2Lv http://t.co/pacs6ww2Qr
Heath Sterling
2 Sep 14 04:31:15
@BigProfitTrader Thanks For The Follow And Gl Trading Today #MarketWatch http://t.co/EbgY9Cf3gn #OptionsTraders $AAPL $FB $F $TWTR $MS $SPY
jess chestler
2 Sep 14 04:21:32
Good to start Sept on an up noteđź‘ŤRT @businessinsider $MS: The market could rally for years-the S&P might go to 3,000 http://t.co/eA3cTxmHmj
Robin Murray MD CFII
2 Sep 14 04:12:36
@TheStalwart $MS #Pundits said that in 2008 right B4 $MS #CRASHED from $50 to $7 #NEVER has regained old highs #HEDGE.#TAKE #PROFIT
Gustavo Neffa
2 Sep 14 03:58:12
Hasta cuándo durará el rally? Dependerá de coyuntura y de ganancias. Pero $MS predice 3000 puntos para el S&P. http://t.co/nuOtJ7MabR
Almost a Trader
2 Sep 14 03:36:39
@clusterstock $MS beat me to the call! Well then I'm calling this the Buzz Lightyear rally- "To infinity and beyond!"
Robin Murray MD CFII
2 Sep 14 03:36:04
@NorthmanTrader @businessinsider That is exactly what $MS $GS #PIMPS said in 2007 B4 we #CRASHED to #SPX $SPY 666 in March of 2009 #HEDGE
Wall Street Monitor
2 Sep 14 03:34:17
$MS: Morgan Stanley Enabled Rosneft as No. 1 Until Crimea Grab http://t.co/FLl53Ki1j0 http://t.co/Mlg4ZarVwH
4-traders.com
2 Sep 14 03:15:15
Japan's 'Abenomics' feared in trouble as challenges build http://t.co/KR0FwlRgq2 $MS
4-traders.com
2 Sep 14 03:05:09
Quantitative easing hopefuls may be disappointed as Draghi plays for time http://t.co/dqqkUclVoy $MS
Solo traders
2 Sep 14 03:05:05
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/oZKE2rntiH
Solo traders
2 Sep 14 03:05:02
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/n28lBgnSvx
Solo traders
2 Sep 14 03:05:00
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/XjIE1geqqj
Solo traders
2 Sep 14 03:04:58
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/1kH6rKjbrI
12Stocks.com
2 Sep 14 03:01:19
Weekly S&P100 #Stocks Performance $AMGN $GILD $UNH $EXC $HPQ $NOV $HD $APC $MS $VZ $AMZN $AEP $MET $GS more@ http://t.co/n4QZIDxy7w
PriceTrader
2 Sep 14 02:34:11
$ms very interesting, finally brokeout of that 33.5 resistance area. i like it, odds are big time that it will be higher 6 month from now :)
4-traders.com
2 Sep 14 01:30:02
European Investors Eye Ukraine, ECB http://t.co/xigJmdd7Nv $DAX $LUX $MS
4-traders.com
2 Sep 14 01:05:04
European Investors Eye Ukraine, ECB http://t.co/ZFwF5FEuRc $DAX $LUX $MS
4-traders.com
1 Sep 14 23:45:37
Enanta Pharmaceuticals : to Participate in 3 Upcoming Investor Conferences http://t.co/OpINfUDx5Y $ENTA $MS
4-traders.com
1 Sep 14 23:40:18
Akebia Therapeutics President and CEO Butler to Participate at Citi Biotech Conference http://t.co/MEEtpgnzUK $AKBA $C $MS
Stock Headlines
1 Sep 14 23:34:15
$MS: Schwab Loses $15 Million Arbitration Case Against Morgan Stanley http://t.co/YjSsUB5v0W http://t.co/rYxlKRxjK0
4-traders.com
1 Sep 14 23:20:03
State may annul colliery permits http://t.co/Fl9JZYTcj5 $MS $HINDALCO $JINDALSTEL
4-traders.com
1 Sep 14 23:20:02
State may annul colliery permits http://t.co/8VICw9XNnc $MS $HINDALCO $JINDALSTEL
4-traders.com
1 Sep 14 23:05:03
State may annul colliery permits http://t.co/TlmJCsOrX7 $MS $HINDALCO $JINDALSTEL
4-traders.com
1 Sep 14 23:05:01
Morgan Stanley : lowers Magang to HK$2.1 http://t.co/BassLd7Rlo $MS $600808
Auto Binary option
1 Sep 14 22:22:16
RT @ForTraders: JPMorgan Chase : Rothschild http://t.co/ryt3BMpODM $JPM $MS
4-traders.com
1 Sep 14 22:15:03
JPMorgan Chase : Rothschild http://t.co/ryt3BMpODM $JPM $MS
TV_Trading Ideas
1 Sep 14 20:57:17
MS $MS http://t.co/vz7cOHXRs0
Stockaholics
1 Sep 14 20:05:16
$IWEB closed up 100% today, on more than 290 MILLION shares traded! Huge News: http://t.co/ucQcnpafDY $MS $HART $LRDR
Stock News Guru
1 Sep 14 19:34:28
$MS: UPDATE: Morgan Stanley Reiterates On Cisco Systems Following Global Sales Conference http://t.co/ARFOkbHCjb http://t.co/yrFiCJJCmE
Patrick
1 Sep 14 19:00:05
#SENTISHIFTDOWN $HD $MS $TSCO $FORTY $VIPS $EXEL $DIS $IBM $RSX $NFLX #quantheta
Scott Smith
1 Sep 14 18:44:59
Financials $GS $GS $JPM $MS $BAC $C $WFC gave clues about the possibility of higher stock prices. Posted Aug 8th http://t.co/3Ryo8e9yAg
Patrick
1 Sep 14 18:00:05
#SENTISHIFTDOWN $HD $MS $TSCO $FORTY $EXEL $VIPS $DIS $IBM $SWKS $NFLX #quantheta
				
				
  +Follow September 16, 2013 10:50AM
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