The Market and Quantitative Easing: A Quick Snaphot
Late last month I featured an interesting chart by Phil Gose, of Capital Resource Management in Iowa. The chart featured the S&P 500 with annotations on key events, including Fed intervention, over the past five years. At that time many market pundits were speculating that Fed Chairman Bernanke will use his Jackson Hole, Wyoming, speech to set the stage for another round of Quantitative Easing, aka QE3. And that's exactly what he did. The actual announcement of QE3 came in the press release at the end of the two-day September FOMC meeting last Thursday.
Here is Phil's updated chart, sent to me Friday afternoon. Phil added annotations to show how much "pop" the market experienced after each announced event. You can study this picture and come to your own conclusions, but it is especially interesting to see the previous gains prior to the "sugar" wearing off.
Will we get a comparable pop this time? Or has much of it already been priced into the S&P 500 at the current level. Stay Tuned!