Two surprises surrounding the Federal Reserve dominated the past week’s news, jolting investors and causing volatility worldwide. The first came Sunday night when former Treasury Secretary Larry Summers announced his withdrawal as a candidate to succeed Fed Chairman Ben Bernanke, making Vice Chairman Janet Yellen the frontrunner. The second occurred Wednesday when Bernanke said the central bank wouldn’t taper its bond-buying program known as quantitative easing.
Here is our weekly wrap-up of current issues and their analyses provided by Money and Markets‘ newsletters editors.
The gold market has been bearish. If you’re wondering whether gold has hit a bottom or not, read this column by Larry Edelson, in which he cites three scenarios for the precious metal.
Douglas Davenport gave an overview of the historical performance of the real estate market and, using technical analysis, explained what is likely to happen next.
The budget gridlock on Capitol Hill has made a government shutdown a real possibility, which will hurt the economy. But Bill Hall is convinced that the U.S. economy will be superior to others in the near future — in his article, he defined six reasons to be optimistic.
The Fed’s decision Wednesday came unexpected — see the first reaction of our editors posted on Money and Markets’ Facebook page.
Soon after Bernanke’s speech, Mike Larson criticized the Fed’s decision and explained what is bound to happen next.
Mike Burnick gave his view on what the delay in tapering means for Treasury bonds and bond investors.
Meanwhile, Bernanke’s announcement affected not only the domestic economy, but also world markets. In his column, J.R. Crooks revealed what new global mandates Bernanke has but doesn’t want to admit to.
The Empire State Building REIT has announced plans to file an initial public offering — investors should be able to buy shares at $13 to $15. The total of 71.5 million shares are expected to price Oct. 1.
On the last day of the business week, Mike Larson looked at the Fed situation as if it were a chess game, offering a strategy for investors to take advantage of the events.
Best wishes,
The Money and Markets Team
