Top Trades Before the Fed

Traders geared up Wednesday for Federal Reserve Chairman Ben Bernanke’s last act. Economists polled by Bloomberg expect the outgoing central bank chairman–who made “quantitative easing” common knowledge–is expected to announce another $10 billion reduction in bond purchases. Many economists forecast that the Fed will cut $10 billion every month, thus weaning the economy off of the stimulus that many believe saved the banking system.


Jan. 29 at 9:55 AM

$SPY Insiders claim Fed wants to be OUT of QE biz by Sept. Not much will stop that @Hilsenrath

Some traders said they pulled their money from the market in advance of the 2p.m. announcement for fear that tapering triggers a sell-off.


Jan. 29 at 9:49 AM

Largely in cash. Not rushing to make any moves ahead of FED $SPY $IWM

Others put money into health care names with promising stories that they believed would be largely unaffected by macro conditions. Organovo Holdings, $ONVO, was up more than 20% in the down market. The company, which creates three dimensional human tissues, announced delivery of its first 3D liver tissue to a lab for testing this morning. It also announced that it was on target to generate revenue before the end of the year.


Jan. 29 at 9:45 AM

$ONVO i for one am loving this chart and don’t see it heading below 10 again

Still others tested technology. Freescale Semiconductor, $FSL, rose more than 16% on better than expected guidance during its earnings call. Technology stocks in general, however, took a beating. Powershares Technology ETF, $QQQ, was in the red this morning.


Jan. 29 at 9:55 AM

$FSL Buy this and hold it for 2 yrs. You’ll get 2x at least imo.

While traders hunted for value in what most assumed would be a down market, others bucked the trend. They bet against consensus forecasts for stimulus cuts, arguing that the economy was still too weak for aggressive tapering.


Jan. 29 at 9:02 AM

$GLD How much DOW will tank today IF BEN cuts another 10B out, I cannot even imaging. He better taper on taper for now.

Recent economic indicators give some credence to that view. The Census Bureau announced yesterday that orders for long-lasting, “durable” U.S. manufactured goods fell 4.3% to $229.3 Billion. Economists had expected a 1.8% rise. However, consumer confidence is at the highest level since August and housing prices are up.

~ Catherine Holahan (@cholahan)

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