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QE Playbook May Not Work This Time Around

S&P futures

have weakened going into the open...this is likely due to the cynics who believe that using the

quantitative easing

playbook that was so successful last summer and fall will not be as successful this time around.

Also, Europe is weaker, as French and Italian banks are down again.

In the past few days, we've had several supportive policy actions by European Central Bank and U.S. Federal Reserve policymakers. Some believe that will provide some stability to stocks—a minority of traders have already convinced themselves that the Fed has given them a green light to use a similar playbook to last summer (short dollar/long commodities-commodity stocks).

Don't kid yourself: This is not last summer. I see little if any conviction on the part of traders. Most remain opportunistic short-term, but bearish long-term.

As for volume, sell-side traders—and exchanges such as the New York Stock Exchange (NYSE) and the Nasdaq—have been delighted at the torrent of buy and sell orders after a year in which the buy side exhibited little interest in equities. But don't think that 8 billion to 10 billion share days at the NYSE, twice normal volume, have suddenly become the norm, as it has been in the past week. We will likely drop back to 4 billion share days as soon as volatility calms down; that is more likely than not in the next week.

One bit of good news: The public has woken up and economics has been front-page news for two weeks.

I hope that will continue (we need the debate), but if you think the public will be endlessly fascinated with this story, consider this: The area around the NYSE has been covered with TV trucks every morning since late last week.

Wednesday morning, there are no TV trucks outside.

Elsewhere:

1. Thank you, Ben! The Fed has tossed a giant Valentine to the Treasury Department. Sixty percent of the U.S. debt will need to be rolled over in the next three years, according to Jason Trennert at Strategas. By guaranteeing that at least short-term rates will remain low for the next two-and-a-half years, the Fed has dramatically lowered the borrowing costs for the Treasury.

2. I noted Tuesday mortgage rates will likely drop further. The Mortgage Bankers Association noted a drop in the average 30-year mortgage last week to 4.37 percent, the lowest since November. Refinancings are up, but purchases are not, and there is the ongoing problem: Low rates alone are not doing it for housing. ?

3, Macy’s rises 5 percent in pre-markettrading after earnings beat estimates (55 cents a share vs. 50 cents a share consensus). Same-store sales rose 6.4 percent in the quarter and the department store gained market share. Looking ahead, full-year outlook for same-store sales has been raised, with second-half same-store sales now expected to rise 4 percent to 4.5 percent. Full-year earnings guidance is also raised to $2.60 a share to $2.65 a share , above $2.58 a share consensus. ?

4. Ralph Lauren jumps 9 percent after first-quarter earnings handily topped estimates ($1.90 a share vs. $1.45 a share consensus). Sales soared 34 percent, more than expected, and the stronger demand helped offset heightened input costs. More strong sales growth is ahead, as the apparel maker/retailer raised its revenue growth forecast to a growth rate of high teens and low 20 percent range this quarter. The company also increased its operating margin forecast for the year. ?

5. The Walt Disney Company falls about 3 percent even after its third-quarter earnings beat estimates (78 cents a share vs. 73 cents a share consensus) led by stronger than expected growth in ads at its cable units and attendance at its theme parks. One area of weakness was its film studio, which saw revenues slip 1 percent and earnings plunge 60 percent from a year ago, disappointing the Street.