Market Preview: No QE3, No Problem

NEW YORK (TheStreet) -- Will Ben Bernanke throw Wall Street a curve ball tomorrow?

Stocks have surged since early June in anticipation that the Federal Reserve will come across with another round of quantitative easing on Thursday afternoon when it wraps up its September policy meeting but it's worth remembering the central bank's next policy confab is waiting a little more than a month away.

Yes, the August jobs report was a bummer but it wasn't exactly a disaster with a 96,000 increase in non-farm payrolls. The Fed's mantra has been that it's ready to step in with "additional accommodation as needed" to help the recovery but what's the determining factor confirming that time is now?

Why not keep twisting a bit longer, and save QE3 for the Oct. 23-24 meeting? Make it a treat before Halloween (and coincidentally closer to the presidential election on Nov. 6)! The contrarian in Bernanke has to be bristling a bit at the prospect of moving in lock-step with investor expectations.

Just food for thought. The much-greater likelihood is that QE3 will arrive right on time. That's also the view Sharon Lee Stark, chief market strategist at Sterne Agee; although she left the door open a tiny bit for a September surprise from the FOMC.

"Persistent unemployment and slowing manufacturing production, coupled with the lack of action on fiscal programs, may force the Fed's hand this week and complete the second leg of a coordinated strike by world central bankers," she wrote, adding later: "I expect the Fed will take action this week to both commit to a extended period of zero to 25 bps short-term rates and long maturity bond purchases to anchor long term rates to ensure availability of affordable credit to small businesses and corporations in the capital markets."

She continued: "The Fed could opt to take these actions in two steps, in which case, QE3 is announced at the October FOMC meeting. I would not expect any changes to my outlook, and near-term market reaction may be a brief sell off in the markets and then recovery as investors position for what is expected from the next meeting."

In other words: no QE3, no problem.

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