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
TheStreet Open House

The Fed Won't Tighten Until Jobless Rate Dips Below 6.5%

By Gary Harloff

Fed Chairman Ben Bernanke, in a speech to the Joint Economic Committee of the U.S. Congress on May 22, 2013, hinted that the Fed would someday taper its monthly buying program of $85 billion in longer-term Treasury bonds and Mortgage Backed Securities.

“Someday” is probably when unemployment drops below 6.5% and inflation rises above 2%. Big banks panicked by selling bonds based on Bernanke’s comments, and drove up bond yields worldwide. Their panic was manifested by the Dow Utility index being driven down 14% at the open on May 23, for about 15 minutes.

I personally believe that the so called “big bank panic” also drove down utility prices, Japanese stock prices, and more. Chinese manufacturing weakness was revealed on May 23 and this news also drove down Chinese stock prices.

I believe bank short selling has only enough powder to drive a sharp drop in prices for a few days. Hedge funds and banks all share the same information instantaneously and act together. In my opinion, the market declines were premature and prices will recover within several days.

I like banks, small-cap value stocks, Dow and S&P 500 Index stocks at this time. I don’t see a sharp move higher or lower here, first a recovery then a muddling through increase over time.

My personal analysis indicates that all style-box indexes have good momentum with value ahead of growth.

I believe utilities and gold have negative momentum, and semiconductor, oil, and finance momentum are positive. The world indexes have positive price momentum with Germany highest, followed by U.S. and the U.K.

Because the markets can turn quickly, be ready. May the market be with you.

Gary Harloff

Gary Harloff

Harloff Capital, an SEC registered investment advisor was founded by Gary Harloff. Gary has a Ph.D. in Aerospace Engineering and

null

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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

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