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S&P 500 in the aftermath of QE3: Between resilience and denial

Looking back on all the prior major non-conventional easing measures in the past years (QE1, QE2, Operation twist, LTRO), it took on average 6 weeks for the S&P500 to go up by more than 9% after the policy announcement, the techs by 11% and industrials by 12%. This time around though, we are experiencing an unprecedented course of events with the S&P 500 hitting its peak for the year after the policy announcement, with the index down 2% at the time of writing, i.e. 6 weeks after the unveiling of QE3. It is also worth mentioning that on post QE-rallies momentum had become increasingly diminishing, with the S&P 500 revenues set to decline on a YoY basis for the first time in over three years. Could this mean that despite the Fed’s money printing efforts, investors should be prepared for adverse results? Time will be the Judge…
Dafni Serdari
Market Analyst

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