This afternoon finds the major financial market averages drifting back to their opening session lows. Weakness in the market has become widespread as all ten major sectors are in the red.
As of 12:30 p. m. ET, energy is at -2.1%, industrials at -2.0%, and the worst performer is health care reporting a low of -1.9%. Th Dow Jones Industrials are down at -150.87. Stocks have been unable to extend their rebound.
With stocks currently stuck in the red, this leaves Treasury Bonds seeing an slight uptick with some solid buying interest.
The market sits this afternoon waiting for Federal Reserve Chairman Ben Bernanke’s speech scheduled for Friday in Jackson Hole, WY. The most anticipated phrase on everyone’s lips in advance of the Bernanke speech is “quantitative easing” or QE3. Last year in Jackson Hole, Bernanke set the stage for QE2 in order to stimulate the flailing U.S. economy. The economy this year is a little better however, the recent poor economic data has many wondering if Bernanke is ready to set the stage for QE3.
The new fiscal tightening policy in the United States brings to light the need for a loosening of monetary policy by the Federal Reserve. Some economists believe that drastically tightened federal spending could actually constrict the economy and should be balanced by a somewhat looser monetary policy to keep the nation’s economy from slipping back into recession.
Investors will be listening for any positive measure from Bernanke’s speech on Friday. Economists believe any uncertainty in Bernanke’s language could spell shock to the already skiddish market in the U.S. and extending globally as well.