This Day On The Street
Continue to site
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

Market Preview: Betting on Ben

NEW YORK ( TheStreet) -- Ben Bernanke and the Federal Reserve went all-in on Thursday and 401(k) accounts across the land saw an immediate benefit. The next step is for all this stimulus to start making an impact in the want ads.

Here's the key line in the central bank's policy statement: "To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens."

That's the crystallization of Bernanke's stated objective to move toward using communication as a policy tool. It's a gutsy approach. Words are just words, of course, so Thursday's other actions -- purchasing $40 billion in mortgage-backed securities per month, extending Operation Twist, sticking with its zero interest rate policy into at least mid-2015 -- are the meat in this stimulus sandwich but don't underestimate the psychological power that pledge to hang in until the recovery is on solid footing may ultimately hold.

Juicing stock prices is the easy part. Translating more money printing into a hiring blitz by America's businesses big and small and improvement in the housing market are other things entirely. But knowing Bernanke has their back for the next few years could very well prompt CEOs to loosen the purse strings a bit and start putting taking a chance on growth ahead of the cold efficiency that's been the mantra since the financial crisis set in.

Knowing the Fed is going to be there buying those mortgage-backed securities each month, and maybe some Treasuries down the line as well, should get banks lending with a bit more alacrity than has understandably been the case for years now.

After Thursday's buying wave, the major U.S. equity indices are all looking a bit overbought in the near-term and Wall Street's attention is set to turn to the Nov. 6 presidential election and the fiscal cliff, so the trading could get choppy over the next few weeks.

Taking a step back though, the bears may opt for an early hibernation this winter because between what the European Central Bank did last week and what the Fed pulled off today, the conversation has shifted from what will the world's central banks do to right the ship to will it work?
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ALOG $79.17 -1.37%
BAC $14.80 -1.50%
JPM $63.60 -0.80%
WERN $26.18 -1.60%
AAPL $95.03 -2.90%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs