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Investing Advice: A Big Week for Central Banks

Posted On June 13, 2018 2:03 pm
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4.  QT vs the S&P 500

Depending who you ask, QE had either little impact or major impact in driving stocks higher over the past 10 years. If QE was helpful, then it stands to reason that QT will be harmful. As the pace of QT steps up through this year, the S&P 500 could end up on the receiving end of the completion of this grand monetary policy experiment as the Fed comes full circle.

  1.  Global Central Bank Balance Sheet Expansion

Finally, for some global context, the major QE banks (The Fed, ECB, and BOJ), are actually all headed in the same direction.  Although its worth noting that with Europe and Japan the balance sheets are still very much expanding, but just at a slower pace.  For now this is providing some offset against Fed Quantitative Tightening, but the question is for how long.

 Related: These 15 Tech IPOs Can Give You Double-Digit Gains! 

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Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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