Federal Reserve chief Ben Bernanke is expected to testify before Congress on Wednesday. How should investors be trading ahead of the event? Peter Costa, president of Empire Executions, and Warren Meyers, CEO of Walter J. Dowd, shared their insights.
“I am looking towards Chairman Bernanke coming out a little less positive,” Costa told CNBC.
“They’ve already set the tone by raising the discount rates.”
Costa said although the Fed will not state a specific time for raising interest rates, he expects it to use tones that imply a change in the near future.
Meanwhile, the Senate Banking Committee was expected to release a new draft of its bipartisan financial regulatory reform bill this week. However, the event has been delayed until at least next week. Until then, Meyers said the uncertainty will drive stocks lower.
“The market hates uncertainty and until you start to see some real answers come out, you’re going to get a lot of opinions on both sides,” he said.
“If you look at the volume you’ve seen over the last few weeks, it’s been abysmal. And that’s a testament to the fact that people are uncertain and people are unwilling to jump into the market and when you have that environment, you tend to start to drift a little lower,” he added.
Meyers said he expects the S&P to bounce around the 1,050 to 1,111 range.
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No immediate information was available for Costa or Meyers.