Janet Yellen from Jackson Hole, More QE in Sight

Janet Yellen from Jackson Hole, More QE in Sight

Janet Yellen from Jackson Hole: More QE in Sight

$DIA, $SPY, $QQQ, $VXX

Friday, US Fed Chairwoman Janet Yellen suggestion that she may consider further asset purchases aka QE to boost the anemic economy is yet another political “band aid”.

Ms. Yellen, speaking Friday at a conference of central bankers and economists in Jackson Hole, WY, said while the US economy has strengthened to the point that interest rate hikes are possible, further asset purchases must remain part of the Fed’s toolkit.

Experts have long criticized world’s central bankers for keeping interest rates ultra-low and artificially inflating asset prices without adding sustainable economic growth.

“Janet Yellen is opening the door to creating even greater asset bubbles as have the BOJ and ECB and SNB by purchasing corporate bonds and stocks,” Bill Gross wrote Friday in an e-Mail. “This is not capitalism. This is providing a walker or a wheelchair for an ailing economy. It may never walk normally again if monetary policy continues in this direction.”

 

Mr. Gross said Ms. Yellen’s comments did not take a September rate hike off the table, especially if job growth is healthy.

The Labor Department reports August employment data on 2 September. The probability of a hike at the 21 September Fed meeting has risen to 38% from 15% weeks ago, according to the latest CME data.

Friday, the US major stock market indexes finished at: DJIA -53.01 at 18395.40, NAS Comp +6.71 at 5218.92, S&P 500 -3.43 at 2169.04

Volume: Trade was light with about 797-M/shares exchanged on the NYSE

  • Russell 2000 +9.0% YTD
  • S&P 500 +6.1% YTD
  • DJIA +5.6% YTD
  • NAS Comp +4.2% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.15) Neutral (-0.23) Neutral (0.10) Very Bullish (0.58)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.08) Neutral (-0.17) Neutral (-0.02) Bullish (0.42)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.29) Neutral (0.24) Bullish (0.29) Bullish (0.33)
HeffX-LTN Analysis VXX: Overall Short Intermediate Long
Bearish (-0.39) Neutral (-0.08) Bearish (-0.40) Very Bearish (-0.71)

Have a terrific weekend.

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