This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

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