GO
Loading...

Is the Fed Looking at $2 Trillion Of Easing?

The S&P traded at a 5 1/2 month high on Monday with stocks gaining as the dollar declined.

Goldman Sachs helped to drive the greenback lower, after a note issued by the firm suggested QE2 could total as much as $2 trillion when all is said and done.

As you likely know, the Fed is widely expected to announce a new program of asset purchases, or quantitative easing, at the conclusion of its next policy meeting which wraps up on Nov. 3.

What the Street doesn't know is how aggressive the Fed will be though whisper numbers suggest it should be north of $500 billion.

What’s does the chatter mean for your portfolio?

Instant Insights with the Fast Money traders

If the Street starts to expect $2 trillion I can’t help but wonder if the market is disappointed when it actually comes, muses veteran trader Gary Kaminksy.

It’s also entirely possibly the Fed may say we’ll do $50 - $100 billion a month until the economy improves, adds Tim Seymour. I don’t think the market will like hearing that either.

But the bottom line is that we’re still facing a lot of questions about QE2, Seymour adds, and until we get answers I expect the dollar to decline and commodities to go higher.

Commentary out of G20 suggests to me Geithner wants the dollar to move lower in an orderly fashion, adds Joe Terranova. I believe there's more downside. And looking at the market broadly I think the chase for performance continues into year's end. Two strong reasons to remain long stocks.

Hear what Peter Schiff --Fast Money friend and author of "How An Economy Grows...and Why It Crashes" -- has to say about the path of the dollar.

Watch the video now!












----------

TALE OF TWO BANKS: CITI VS. BofA

Call it a tale of two banks; Citigroup topped the tape after being added to Goldman's "Conviction Buy" Here’s what they had to say:

“We believe C’s exposure to private label put-backs should be significantly lower than peers. ...C’s consumer mortgage business issued $25 billion and its Securities and Banking business issued only $70 billion, a very small amount relative to other market leaders.

What's the trade?

I’d bought Citi on Monday, says Joe Terranova. If Citi can get above $4.30 I think the momentum returns.

Meanwhile, rival Bank of America closed lower – unable to climb out of the mortgage "put back pit."

What’s the bank trade?

Things just get worse and worse for BofA, however I think the rhetoric will turn at some point, says Karen Finerman. But I wouldn’t buy this stock right now.







______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our Web site send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Oct. 25, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (F), (NOK); Finerman owns (AAPL); Finerman & Finerman’s Firm owns (BAC); Finerman owns (GOOG); Finerman & Finerman’s Firm owns (JPM); Finerman’s Firm owns (HPQ); Finerman’s Firm owns (MSFT); Finerman’s Firm owns (SKS); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts; Terranova owns (APA), (AAPL), (AXP), (C), (GOOG), (GS), (IBM), (ISRG), (MCD), (MDT), (MMM), (NKE), (ORCL), (OXY), (PEP), (PFE), (PCP), (UPL), (VRTS), (XBI); Weiss owns (QCOM), (AKAM), (VZ), (TXN), (COP), (NIHD)

For Gary Kaminsky
***No Disclosures***


For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DRYS)

For Peter Schiff
***No Disclosures***

For Chris Raymond
Robert W. Baird & Co. makes a market in (AMGN)
Robert W. Baird & Co. intend to seek investment banking compensation from (AMGN) within the next 3 months

For David Sackler
Moab Capital Partners Owns (RGS), (RGR)


For Bill O'Donnell
***No Disclosures***

For Mike Khouw
Cantor Fitzgerald makes a market in (EXPE)

CNBC.com and wires

Symbol
Price
 
Change
%Change
S&P 500
---
BAC
---
C
---

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report