NEW YORK ( TheStreet) -- Wall Street watchers eager for further monetary stimulus may want to be careful what they wish for. The subtext of the message delivered by Federal Reserve Chairman Ben Bernanke on Thursday was that economic conditions would have to get much worse in order to merit more accommodation; be it an extension of Operation Twist or QE3. The view of Julian Jessop, an analyst at Capital Economics, is that there have been no big surprises of late to merit getting worked up about the possibility of the world's central banks swooping with a big rescue plan and that it may make more sense to hope things don't deteriorate to the point where such a plan would be necessary. "The upshot is that there have been no 'game changers' this week," he wrote in emailed commentary. "It is no great revelation that, if economic and financial conditions continue to deteriorate, policy-makers will attempt to support growth. But in the circumstances in which they are likely to have deliver on their promises, underlying demand for industrial commodities in particular would probably be very weak and consistent with further falls in prices." Paul Ashworth, the chief North American economist at Capital Economics, was of a similar mind and he found it interesting that Bernanke was vocal about U.S. legislators taking action to address the fiscal cliff. "Bernanke's testimony didn't mention options for future monetary policy stimulus, which is telling in itself," he said. "It focused instead on urging Congress to avoid any massive fiscal tightening at the start of next year while, at the same time, to take action to put the budget on a long-term sustainable path." Ashworth expects how Europe fares from here to be the determining factor on whether the Fed steps up once again. He believes an extension of Operation Twist is possible but views that more as a "symbolic act" as the central bank could really only keep the program up for a few more months. "Whether we see a full-blown QE3 will depend a lot on how the situation in Europe develops," he wrote. "A Greek exit from the euro that turns out to be significantly disruptive for global financial markets would undoubtedly prompt a very rapid and powerful response from the Fed. But didn't we know that already?"
It's a light day for scheduled news with no major earnings reports and trade balance and wholesale inventories data for April. Dow component McDonald's ( MCD) is slated to report its monthly sales figures on Friday. After being the best performer among the blue chips in 2011, the hamburger purveyor has been a laggard since the calendar turned over, falling 12% year-to-date. On Thursday the stock ticked 28 cents lower to close at $88.38, putting it down 13.5% since hitting a 52-week high of $102.22 on Jan. 20. Deutsche Bank sees opportunity in the weakness, reiterating its buy rating and $100 price target on Thursday. "MCD's has one of the most stable business models in the world, with the majority of earnings coming from rent+royalty payments generated by a healthy franchisee base (~75%)," the firm said. "We believe the market is undervaluing the predictability of these cash flows, as well as MCD's track record for managing through difficult macro environments, incl. Europe." Among the potential positive catalysts that Deutsche Bank sees for McDonald's shares in the second half of 2012 and into 2013 are the London Olympics, the potential for a dividend increase and an improving margin outlook. "We see a favorable risk-reward in MCD's shares, with ~20% upside to ~5% downside," the firm said. "The upside case assumes MCD just hits consensus forecasts for 2013 and returns to a more reasonable valuation (17x P/E). The downside case of ~5% is based on ~$6.00 in earnings in 2013 and the 2-yr trough multiple of 14x. (If we were to instead use the 5-yr trough multiple (~13x), we would see about 10% downside, still 2-to-1 upside-to-downside.)" Check out TheStreet's quote page for McDonald's for year-to-date share performance, analyst ratings, earnings estimates and much more. And finally, shares of Francesca's Holdings ( FRAN) surged in late trades on Thursday after the Houston-based specialty apparel retailer reported better-than-expected quarterly results and gave a solid outlook. The company forecast earnings of 22 to 23 cents a share for its fiscal second quarter ending in July on sales of between $69 million and $71 million, hinting at upside to the average estimate of analysts polled by Thomson Reuters for a profit of 22 cents a share on sales of $68.6 million. The stock was last quoted at $25.54, up 14.5%, on volume of nearly 140,000, according to Nasdaq.com. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.