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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
Stockaholics
23 Oct 14 12:01:26
Our Penny Stock Alerts Gained 371% In 2 weeks! Sign Up For Free Text Alerts For Our New Pick: http://t.co/dLDRavoCi4 $MS $HART $LRDR
Richard Cabrera
23 Oct 14 11:51:15
I'll either benefit from $ms earnings report or I'll get skewered #investing
DaylightDisinfectant
23 Oct 14 11:07:02
@pacificrk @SalKeizSentinel gun grabber Shiprack owes $Ms in defaulted loans to PDX, committed felon. sale of property. Does she get a gun?
Lauren Holmes
23 Oct 14 10:47:27
Which is the best bank, $MS $C $JPM or $WFC? Check what we think here http://t.co/IhJaUAjPfb
Bloomberg TV
23 Oct 14 09:16:30
RT @WillemMarx: Olympic Village builder donates $Ms to politicians, and wins $Bns in #Brazil's state contracts http://t.co/ZZyMYs4APG
nextSTL.com
23 Oct 14 08:54:25
@chesterlampkin @newsformaggie One big issue in STL is that $Ms in bike infra (bike trails) built for recreation & not necessary daily use.
Trill Trades
23 Oct 14 08:18:34
$MS Will long over the 50 day. Nice cushion below at 50% fib retrace
4-traders.com
23 Oct 14 08:10:07
Societe Generale to move London branch to Canary Wharf http://t.co/iI0B51X29g $GLE $MS $JBK $BARC $SDDL $TBHS
Willem Marx
23 Oct 14 07:58:40
Olympic Village builder donates $Ms to politicians, and wins $Bns in #Brazil's state contracts http://t.co/a3XsBRPhLv http://t.co/oVPB9ZKK97
Zachary Tracer
23 Oct 14 07:21:59
RT @MooreMichaelJ: Amid Fed scrutiny of phys. commods, $MS set up a nat gas compression and shipping business. Now it's looking to sell htt…
Michael Moore
23 Oct 14 07:19:23
Amid Fed scrutiny of phys. commods, $MS set up a nat gas compression and shipping business. Now it's looking to sell http://t.co/uOvhUT0IyA
NASDAQ
23 Oct 14 07:10:56
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/mPfCRVixoG
Solo traders
23 Oct 14 07:10:47
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/9okzjcpEKM
Diego R
23 Oct 14 06:08:02
RT @ACInvestorBlog: Set-ups for Thursday http://t.co/x9UN2uilMR other stocks to watch $CAT $AAPL $JAKK $FB $YHOO $VSR $LAKE $COCO $VIPS $BI…
Antonio Costa
23 Oct 14 06:04:18
Set-ups for Thursday http://t.co/x9UN2uilMR other stocks to watch $CAT $AAPL $JAKK $FB $YHOO $VSR $LAKE $COCO $VIPS $BITA $F $C $YELP $MS
Jonathan Marino
23 Oct 14 05:38:24
RT @dan_freed: Fifth St. reportedly wouldn't lwr price & wanted $MS to increase retail allocation of IPO it withdrew yesterday. http://t.co…
Aaron Lucchetti
23 Oct 14 05:35:33
RT @dan_freed: Fifth St. reportedly wouldn't lwr price & wanted $MS to increase retail allocation of IPO it withdrew yesterday. http://t.co…
Dan Freed
23 Oct 14 05:31:17
Fifth St. reportedly wouldn't lwr price & wanted $MS to increase retail allocation of IPO it withdrew yesterday. http://t.co/Hoj5Ag9ilT
Wh_i_neyErny
23 Oct 14 04:56:23
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Solo traders
23 Oct 14 03:05:33
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/vbS0nd3uSG
Solo traders
23 Oct 14 03:05:32
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/WpLiEgd6Uc
NASDAQ
23 Oct 14 03:05:17
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/xFcx6i7OsF
NASDAQ
23 Oct 14 03:05:16
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/4zX8lcmzhf
Stockaholics
23 Oct 14 01:05:14
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $MS $HART $LRDR
Dan Fessler
23 Oct 14 00:58:20
#Buy $DNAX #DNA #Energy #Drinks #New #CEO #Real #Experience > $FNMA $HEMP $PMCM $PHOT $PLPL $CBIS $JPM $GS $MS $TSLA $FB $TWTR $GOOG $MSFT
Al Sutton
23 Oct 14 00:05:53
Comparing the latest OSes from $MS, $APPL, and $GOOG, it seems that MS & APPL are highlighting G's lack of an established desktop/laptop OS.
4-traders.com
22 Oct 14 22:40:18
Morgan Stanley : starts CAR Inc. at HK$11.2 http://t.co/sz3si8RGCW $MS
4-traders.com
22 Oct 14 22:20:05
Bond funds stock up on Treasuries in prep for market shock http://t.co/BaZlt5IMGv $BABA $MS $MOVE $0IBW $JBK $S3314 $S3258 $HTG $MLMAD $HIS
Theb55
22 Oct 14 20:27:38
@Mosher51 I hope you are right. Like most dictators, he controls the media including CBC, the police, elections Canada & industry pays $Ms
wininstocks2014
22 Oct 14 15:15:06
MS 33.43 Stock Charts $MS Morgan Stanley (NYSE) Last Updated: 10/22/2014 17:15:04 MS Stock Chart - 1 Month htt http://t.co/X4Q3UJC68B
Ken Roper
22 Oct 14 15:11:09
@w0tn0t @Mikeoflondon @QueenLareefer1 @davidbritain7 Agree but too many lefties for it to be reintroduced. Why spend $ms on them in goal
Werner R. Kranenburg
22 Oct 14 14:55:33
Eight is the current number of federal class actions concerning $GTAT $GTATQ filed against its leadership and $MS $GS $CCORF
Consestimate
22 Oct 14 14:50:21
Apple Analyst Recap #2: Two Neutral And Three Positive. $AAPL, $MS. http://t.co/we7fjbpD0q http://t.co/rWtOf73Ww4
Consestimate
22 Oct 14 14:47:37
YELP SHARES CRASH (YELP). $YELP, $GOOG, $MS. http://t.co/DIw5uetE8h http://t.co/jIZglqPYJs
Consestimate
22 Oct 14 14:43:08
U.S. Court hears arguments on sex discrimination at Goldman Sachs. $GS, $SO, $MS. http://t.co/uD1BkRD3YA
Solo traders
22 Oct 14 14:25:33
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/ZaE54Ymw9q
4-traders.com
22 Oct 14 14:25:25
U.S. Court hears arguments on sex discrimination at Goldman Sachs http://t.co/Q9ScoCPeIn $C $GS $MS $PRCH $S1990 $TBHS
NASDAQ
22 Oct 14 14:25:22
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/29vYtQkCwg
Solo traders
22 Oct 14 14:22:18
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/hKR8LQfcqx
Solo traders
22 Oct 14 14:19:19
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/P8ex0ik8og
Bidness Etc
22 Oct 14 14:15:36
The Federal Reserve has warned all financial institutions, including a few nonbanking firms http://t.co/7TqHmJZ2aM $MS $GS $CS $JPM
Solo traders
22 Oct 14 14:10:51
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/5yyyXfdoyq
Sital S. Patel
22 Oct 14 14:05:14
Apple Pay glitch charges some Bank of America users twice: http://t.co/nXwWt0zz6g $MS
Solo traders
22 Oct 14 14:04:12
$MS - Prospectus Filed Pursuant to Rule 424(b)(2) (424b2) http://t.co/tGNiTTRdxo
Solo traders
22 Oct 14 14:04:11
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/cKSEEaqWwO
Quantheta
22 Oct 14 14:00:02
#SENTISHIFTUP $EE $RSH $QUAD $YY $MS $CHK $FEYE $SHLD $IR $O #quantheta
Solo traders
22 Oct 14 13:58:03
$MS - Free Writing Prospectus - Filing Under Securities Act Rules 163/433 (fwp) http://t.co/WbpeCGxNqH
Jake Catskill
22 Oct 14 13:50:58
Here's the funny thing about the IPO boom, excess stock inventory on the banks books. I wonder how much $BABA is still in $GS and $MS?
Stockaholics
22 Oct 14 13:43:50
Our Penny Stock Picks Gained 371% In 2 Weeks! Get Our Next Pick Early: http://t.co/z2noBUWrEP $MS $HART $LRDR
Stock Relay
22 Oct 14 13:39:10
wininstocks2014: Stock Charts: MS 33.43 Stock Charts $MS Morgan Stanley (NYSE) http://t.co/6vW4Po85cw
				
				
  +Follow September 16, 2013 10:50AM
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