) -- Evidently Wall Street was expecting an early Christmas present from Ben Bernanke & Co.

Heading into this final one-day meeting of 2011, the drumbeat for more quantitative easing from the Federal Reserve wasn't very loud but apparently investors wanted to see some groundwork laid. If not that, they may have been expecting more color on the shift the central bank has been telegraphing toward a more explicit communications policy. At the very least, there was anticipation for a clear and unequivocal acknowledgment that the economic data is really and truly getting better.

Instead, they got almost nothing, a mere tweak of the policy statement, and stocks slowly sold off through the final two hours of Tuesday's session.

Economic research firm Capital Economics summed it up by saying the statement was "perhaps not as cheery as some might have been hoping for."

And a lack of cheeriness is always disappointing this time of year.

Not to worry though, QE3 is still a very real possibility, Capital Economics said, possibly arriving as soon as next month.

"We suspect that we won't have to wait much longer, however, with QE3 coming in the first half of 2012, possibly even as soon as the next FOMC meeting in late January," the firm wrote. "Despite signs that economic growth might be picking up a little, many Fed officials still feel that the elevated unemployment rate warrants further action."

Capital Economics also noted that it makes more sense for the Fed to save big news for a two-day meeting so that Bernanke can meet the press and explain the rationale for the central bank's decisions, so let the expectations start rising for the conclusion of 2012's first meeting on Jan. 24-25.

It's an odd week for the markets with very little scheduled news, and the lingering doubts about Europe are always lurking at the edge of any rally. The comments from German Chancellor Angela Merkel that bruised sentiment on Tuesday weren't really new but they were enough to spook traders. Gary Thayer, chief macro strategist at Wells Fargo Advisors, looked back to 2008 to explain the crossroads the market's psyche seems to be at right now.

"The history of the 2008 financial crisis suggests that policy makers only need to restore confidence, not resolve all problems, in order to stabilize the financial markets," Thayer wrote. "Recent market action suggests we are not at that point yet in the European crisis. However we may be getting closer. In the meantime, the global economy remains at risk because of problems in Europe."

That may be it in a nutshell. It's not that Europe's leaders need to account for every possible eventuality of the region's sovereign debt crisis but they still do need to sell the world on the idea that they can handle whatever comes their way.

As for Wednesday, quarterly reports are due from a motley crew of companies, including

Apogee Enterprises

(APOG) - Get Report


Joy Global



KV Pharmaceutical



Pantry Inc.



Rick's Cabaret International

(RICK) - Get Report

, and

VeriFone Holdings


. No real market movers in the bunch.



should be an active issue though as the chip maker is holding its annual analyst day. The stock closed Tuesday at $28.19, putting the shares down more than 30% so far in 2011. The sell side is fairly bullish with 32 of the 43 analysts covering Broadcom at either strong buy (14) or buy (18), and the remainder split between hold (8) and underperform (3), so this may not be all that contentious a get-together.

But with the stock scraping a 52-week low of $29.02 last week, Broadcom's management definitely has some convincing to do. Oppenheimer, which has an outperform rating on the stock, attributed the weakness in the shares of late to investor fears of a "looming combo chip competition" with


(QCOM) - Get Report

in 2012 that were stoked when Qualcomm held its own analyst event in mid-November.

"We believe these fears are overdone," Oppenheimer said. "The widespread inventory drawdown currently under way likely curbs 4Q upside, but we believe the company is tracking to a roughly in-line quarter. We remain hopeful that a bullish tone, solid 4Q fundamentals and the possibility of management announcing a 3rd Tier-1 baseband customer during the event will prove catalysts."

The firm thinks Broadcom, currently trading at 10.5X the consensus estimate for earnings of $2.67 a share in fiscal 2012, looks attractive at current levels.

"Investors appear to have priced in the bear case for 2012, creating opportunity to buy large-cap growth at a discount," Oppenheimer concluded.


Research In Motion


to be the subject of plenty of market chatter on Wednesday as well ahead of its quarterly report on Thursday. The Blackberry maker's struggles this year are well-documented, and the stock is down more than 70% in 2011, but it remains to be seen if the idea that the shares have gotten cheap enough to take a flier will take hold anytime soon.

Think Equity, which has a hold rating on RIM, said Tuesday it expects a "muted outlook" from the company and showed it's starting to think along those lines.

"While fundamentals could get worse, at current levels we view the stock as a deep value play with our $18 price target based on $9.50 per share ($5B) for IP/ patents, $5.75 per share ($3B) for its BES/NOC

Blackberry Enterprise Server/Network Operations Center services business, zero value for handsets and $2.75 per share ($1.5B) in net cash," the firm said.

And finally,

Avon Products

(AVP) - Get Report

is a candidate to see some heavy trading on Wednesday after announcing it's going to replace long-time CEO Andrea Jung, who's been in charge since 1999.

The cosmetics seller said it's separating the chairman and CEO roles, both currently held by Jung, and embarking on an external search for a new CEO. Jung is becoming executive chairman, and Wall Street seems okay with it, running the stock up more than 4% in

after-hours action



Written by Michael Baron in New York.

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Michael Baron


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