The Fed's Coming Moves Will Likely Make for a More Volatile Market

Fed Chairman Ben BernankeStrong third-quarter earnings and a weaker dollar helped the Dow to a nifty 3% rally in the last couple of weeks, but don't be surprised if further gains are harder to come by in the days ahead, says Joe Greco, managing director at Meridian Equity Partners.

Volatility started to pick up in the last few sessions, and now that a downbeat Federal Reserve Chairman Ben Bernanke has made another round of stimulus all but certain, the market is "beginning to realize that there are some bigger issues coming to fruition," Greco says.

Traders have had ample time to price in a second shot of the Fed's so-called quantitative easing, Greco notes. With the actual Fed meeting (and midterm elections) now just two weeks away, it's fairly likely that the bears will start growling again.

"Bernanke spoke Friday morning, and that resulted in a sell-off," says Greco. "I think that's really the catalyst that's going to move things back lower and give all the bears who [increased their short positions] over the last few weeks an opportunity to cash in a little bit on their positions."

For more on Greco's view from the floor of the New York Stock Exchange (NYX), see the video below.


Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Add a Comment

*0 / 3000 Character Maximum

24 Comments

Filter by:
Samir semaan

I believe the Federal reserve should leave the market correct itself that was known for sometime because all the help has been giving to the market and the banks and the mortguage owners now is the end of all. Banks are stabilized and the manufacturers make good money and the morguages have been helped so now the end of forclosures and the end of market meltdown he has to let the system takes its place.

October 23 2010 at 1:26 PM Report abuse rate up rate down Reply
tevroc143

All the Federal Reserve (a private company, not public) is doing is printing more money and destroying the dollar's value. Holding interest rates low is hurting people who live on investment income. Destruction of the greenback will ultimately remove its power and its staus as the world's reserve currency.

October 18 2010 at 5:50 PM Report abuse +1 rate up rate down Reply
Price Law Office

Vote the Republicans and tea party types in -- if they are able to implement their ideas(?), you will see the recession turn into a ful-blown depression. Isn't it interesting that they espouse austerity, which will likely strangle the fledgling recovery from the Republican spending orgy on tax breaks and wars from 2000-2008, except when it comes to tax breaks for the wealthy? The good news will be that big business and Wall Street will get their money's worth out of bankrolling the right wingers. Who do you think is paying for all the "slam the Dems" commercials we are seeing on TV?

October 18 2010 at 2:22 PM Report abuse -1 rate up rate down Reply
2 replies to Price Law Office's comment
ksmwtm

Bernanke & Geithner say, "It could have been worse!" Tell me that all the TARP & Stimulus monies RE-directed (as in NOT to Wall Street) to Commercial liquidy for small, med. & large businesses, wolud have been worse for Goldman Sachs, Paulson & Rubin & I would have to agree. BUT, not for us! Not for jobs! TARP & Stimulus FAILED! Just look around (except for Wall Street)!

October 18 2010 at 1:24 PM Report abuse +2 rate up rate down Reply
Jetncat

This is what happens when progressives run the country & a 12 trillion dollar economy. I'm not surprised why are you?

October 18 2010 at 11:20 AM Report abuse +4 rate up rate down Reply
2 replies to Jetncat's comment
kittenkiller800

are you saying this mess started in 2008?

October 18 2010 at 1:52 PM Report abuse -3 rate up rate down Reply
cpo1514

Amazing these posts are on the financial section of an internet. It would be better to have this type of discussion in a widely available media. Unfortunately the Obama voters don't relate to economics. More into the free houses (defaulted loans, and free money for jobs). The good folks that have a stake in the economy (investors) are in the middle of a class warfare government and more Socialism from Obama and his traveling clown show. Time to clean house in November.

October 18 2010 at 10:56 AM Report abuse +6 rate up rate down Reply
2 replies to cpo1514's comment
Sandy

I agree vote out all incummberment. Democrates or Republicans. Then see how things go down....

October 18 2010 at 3:59 PM Report abuse +1 rate up rate down Reply
BUFFALO

It drives me crazy when I read things like this story. Did the dopes at the fed have there heads in the sand? The market has been volatile sense the meltdown. The president and his left wing congress have been telling us things that are just not true in order to get elected to office. When there claims don't pan out and there numbers are constantly getting down graded people get confused. This is a product of election year politics. You do not honestly except the left to go on record and state the truth about the economy and there failures during a election?? So the left plods along telling there revised fact and there cooked numbers because they are not getting elected to office again if they don't spin the facts..

October 18 2010 at 10:30 AM Report abuse +5 rate up rate down Reply
1 reply to BUFFALO's comment
marine1942

The Fed is in Obama's pocket. Look for something special to happen before the election

October 18 2010 at 10:23 AM Report abuse +5 rate up rate down Reply
2 replies to marine1942's comment
commonsenseleft

The Fed was in W's pocket -- this is yet more of the fallout from his and Greenspan's failed policies of removing or ingoring regulations protecting average people to pump money to Wall Street and the wealthy. They merely tossed a coin at the middle class, ignored the working class, and relied on a nonexistent trickle-down. And, now, here we are!

October 18 2010 at 10:34 AM Report abuse rate up rate down Reply
bdyftns

Thanks again for the economy George.

October 18 2010 at 10:15 AM Report abuse -3 rate up rate down Reply
2 replies to bdyftns's comment
cpo1514

Yes thank you Dubya- the 5% unemployment was great!!!! The dividends and housing were stable. Thanks to the likes of Socialists in 2008 the wheels starting coming off. We can never forget Barney Frank, Chris Dodd, Harry Reid, Nancy Pelosi, and the host of minions (sock puppets) that started the great give away. I suppose it never occurred to Socialists that other peoples money only goes so far & then you run out of $$$$$$.

October 18 2010 at 11:01 AM Report abuse +5 rate up rate down Reply
Jetncat

The economy started to drop in 2006 when the Democrats & Progressives took over congress. Before that the economy was doing great even with 2 wars & 9/11 we were more stable than after 2006. KNOW YOUR HISTORY BEFORE YOU THROW ON THESE LIES

October 18 2010 at 11:23 AM Report abuse +3 rate up rate down Reply
tj1108

As the deflation turns into inflation Obama and his minions in the media will spin it as the economy has turned around, but this will be short lived as the inflation will skyrocket do to the debt that has been monitized and people will feel the effects quickly. Hang on its gonna be a ride.

October 18 2010 at 10:06 AM Report abuse +5 rate up rate down Reply
2 replies to tj1108's comment
cpo1514

AND THEN CHINA RAISED THE INTEREST RATES. THEN WHAT DOES OBAMA GIVE THEM?????

October 18 2010 at 11:02 AM Report abuse +2 rate up rate down Reply
ksmwtm

cpo1514 well, how bout starting with Chicago?

October 18 2010 at 1:30 PM Report abuse +1 rate up rate down Reply