Back to top

Free: Subscribe to Profit from the Pros

Zacks' Bull Stock of the Day, morning market e-briefing, strategies for picking the best stocks, funds, ETFs, and options plus more.

Join 500,000+ investors in-the-know.

Privacy Policy


View the PFP Archive

Fed Kicks Investors Where it Hurts

After hitting a new high on Tuesday, stocks were having a more casual session early on Wednesday. Then at 2pm ET the Fed released minutes from their late January meetings. Next thing you know the S&P is down -1.2%.

What happened?

Even though Fed officials were optimistic about accelerated economic growth from Q4 levels, the real focus was on growing concerns with the current QE program. Meaning more members are worried about the risk/reward trade off and may want to change parameters of how long they will be engaged in QE... and how much money they will spend.

Was the stock pullback warranted?

On the one hand, a world with less QE would lead to rising rates and potentially a less attractive stock market. On the other hand, the Fed will ONLY lower their QE efforts when they think the economy is ready to stand on its own two feet. When you think about it that way, then the removal of QE should be a big vote of confidence in the state of the economy... and by extension, the stock market.

Next step for investors?

Given the length and breadth of this rally, we were all due for a little wake up call. That could have come in any form. The Fed minutes were just the most readily accessible reason to test investor convictions at this time. Likely after a day or two more of volatility the market will be back to pushing the recently made highs.

Featured Commentaries:

•  Parabolic Rallies & Perpetual Tops

Top 5 Zacks #1 Ranked International Bond Funds

•  Japan ETFs: 6 Ways to Play the Surge


Steve Reitmeister

Executive VP -

Zacks Investment Research

Follow Us:  


Zacks' Best Recommendations for $7?

Others pay thousands of dollars to see such privileged, sensitive information. Yet, we have arranged for you to receive weekly highlights with the Best of Our Best at a tiny fraction of the cost.

Steve Reitmeister, who heads up all of Zacks' portfolio recommendation services, knows which expert has the hottest hand and when a compelling trade is about to be triggered. Then he will confide to you a very tight selection of our best moves and insights.

Learn more now>>

Bull & Bear of the Day

Zacks Rank #1 Strong Buy

Valmont Industries (VMI)

Forging steel into growth for telecoms, utilities, and farmers.


Zacks Rank #5 Strong Sell

Quest Diagnostics (DGX)

Declining revenue growth and Medicare cuts have this medical testing services name on close watch.

Stock Picking Strategies

The Short Ratio as a Stock Sentiment Indicator  ››

What You Need to Know about Your Stocks  ››

Roundtable Top Picks for the Week of Feb. 18th  ››

Funds Commentary

Top 5 Zacks #1 Ranked Wells Fargo Mutual Funds  ››

What is Driving Bank ETFs Higher?  ››

A Technical Perspective on SPDR Gold ETF  ››

Options Strategies

5 Careful Ways to Win with Options  ››

Video Reports

Seven Weeks And Counting

Zacks experts weigh in on factors affecting this momentum driven market.

Low Expectations Drove Q4 Earnings Surprises

The Q4 earnings season was good enough because expectations were so low.

Most Popular ETFs to Start 2013

Eric Dutram, ETF Strategist, talks about funds that have seen the biggest inflows to start the new year.


Increase Investment Returns with Free Zacks' Portfolio Tracker

Follow your investments easily in one place. Get free email updates that alert you to major events affecting your stocks and funds, including time recommendation changes, earnings announcements and, most importantly, earnings estimate revisions.

Click to Learn More>>

Manage Your Newsletter Subscriptions

Update Preferences         Update Your Profile         Unsubscribe         Feedback         Send to a Friend

This free resource is being sent by to our subscribers. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable.

All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, brokerage, market making or asset management activities of any securities. Visit for information about the performance numbers displayed in this press release.

Zacks Emails

If you would prefer to not receive future profit-producing emails from the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please click here and confirm your request. If you have trouble with the unsubscribe link, please email

Zacks Investment Research, Inc.
111 N. Canal St., Suite 1101
Chicago, Illinois 60606