Think Ben Bernankes commentary on Wednesday was good for the market? You may be in for a rude awakening.
At a press conference following the release of an expected Fed statement, Ben Bernanke sounded a more optimistic tone than in the past.
Looking at growth – “Bernanke gave the market what it wanted to hear,” says trader Tim Seymour. And he painted a better jobs picture too.
And he said the Fed wouldn't hesitate to take further action, should the economy require additional support.
All told that sounds like a recipe for a rally, right?
Top hedge fund manager Anthony Scaramucci says that’s not the case.
After talking with his smart money peers, Scaramucci tells us the hedge fund community feels Bernanke was too positive.
“It sounds like he’s jaw boning and trying to talk up the market. That sends the wrong signal,” Scaramucci says.
It creates speculations that Bernanke has other motives and his enthusiasm isn't genuine. As a result, "the commentary will ultimately have a negative impact on the market," he says.
That goes squarely against what happened after the last Fed statement, when the Dow rallied 200 points.
But Scaramucci says don't look for a massive rally this time.
“The Labor participation rate is not where it should be at this point in the cycle, and as a result macro-traders are getting defensive,” Scaramucci says.
Make no mistake, “There are strong headwinds in this market.”