One day he may be remembered as the most important Fed
Chairman ever and on his final day on the job Ben Bernanke and the Federal
Reserve continued the tapering of its asset buying program by another 10
billion. Given that they have cut $10 billion
of purchases at back to back meetings, it is becoming increasingly apparent
that they will end all asset purchases by the end of 2014.
That realization combined with the mediocre
data and earnings we have seen over the last month has sent markets lower, with
the S&P down over 4% to start the year.
The good news is that the pullback at this point is still a healthy one,
and the S&P rally that started 5 years ago is still intact. If the S&P were to break below 1700 it
might be cause for worry, but until that happens we are still clearly in the
middle of a bull market.
January was a bad month for most investors; perhaps
February will bring a little relief as investors continue to digest earnings
data and the potential positives of a future with less Fed intervention.
