This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Market Preview: Searching for a Catalyst

Updated from 6:12 p.m. ET to include information about Sears leaving the S&P 500.

NEW YORK (TheStreet) -- Stocks are still searching for a catalyst, and it's starting to look more and more like Federal Reserve Chairman Ben Bernanke won't cooperate with a big old wink to QE3 come Friday.

"Investors will likely be disappointed if they hope to hear something substantive come from Chairman Bernanke's comments from the Jackson Hole Symposium," wrote Sam Stovall, chief equity strategist at S&P Capital IQ after Wednesday's close. "We think QE3 will likely be announced following the mid-September FOMC meeting - if at all - since U.S. economic data continue to come in either slightly better than expected or show an improvement over the initial reading, such as this week's increase in the S&P/Case-Shiller Home Price Index, upward revision to Q2 GDP and improving tone of the Fed's Beige Book."

The view of John Higgins, senior markets economist at Capital Economics, is that QE3 won't do much for stocks anyway. He left his year-end 2012 forecast for the S&P 500 at 1350 on Wednesday while also keeping his 2013 view at 1400, meaning he sees a whole lot of nothing happening through the end of the next year.

"While the launch of a third round of asset purchases by the Fed could conceivably whet investors' appetite for risk, other factors could dull it," Higgins said. "Foremost among these is a break-up of the euro-zone, which we still think could begin before the year is out. What's more, the underlying yield on 10-year TIPS [Treasury Inflation-Protected Securities] is now significantly negative, at around -0.7%."

Higgins also highlighted the current slowdown in earnings growth, which makes for a much different market environment than when the Fed previously embarked on massive asset purchase programs, and said the central bank's tools for stimulating the economy haven't got the job done so far so it's difficult to believe more is going be better at this point.

"The failure of the economy to recover strongly in recent years has cast doubt on the healing properties of unconventional monetary stimulus," he said. "Skepticism has usurped optimism ... the consensus GDP forecast for next year is currently only around 2.4% - lower than the year-ahead GDP forecast that prevailed when Bernanke hinted at QE2 two years ago."

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,122.01 +15.31 0.09%
S&P 500 2,000.12 +0.10 0.00%
NASDAQ 4,569.6210 -1.0160 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs