If Ben Bernanke is looking to implement a new round of stimulus, he’d be hard pressed to find a reason more compelling than the latest jobs report.
On Friday, chatter on the Street suggested the latest jobs data put QE3 squarely in play after new data showed our nation created only 96,000 new jobs. Estimates were for 125,000. The unemployment rate fell to 8.1 percent from 8.3 percent, but only because more people gave up looking for work.
Currently almost 13 million Americans are now unemployed and a total of 21 million are suffering from some form of under or unemployment.
With the economy appearing to sputter badly, bulls are expecting the Fed to juice the economy with a new round of bond buying which, in turn, should send the dollar tumbling and the S&P surging, especially the materials, energy and industrial names.
On The Kudlow Report, Phil Orlando Chief Equity Market Strategist of Federated Investors said that’s he’s overweight equities.
“We think the economic malaise we saw in the 2nd quarter will be the worst of the year – we think 3 and 4 will be better because of improved consumer spending.”
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Although bulls such as Orlando typically cite other catalysts in the market, the potential of QE3 has often been a dominant influence.
“We’ve been buyers all year,” Orlando added. “We’re overweight stocks and focused on areas that are economically sensitive like technicals and financials and de-emphasizing defensive areas of the market.”
Orlando also said his end of year price target on the S&P 500 was 1450.
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