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Investing Specialists

QE3 Celebrating Over Already?

With the Fed's latest stimulus already on the books, this week's bad news was actually seen as bad news for a change, writes Morningstar's Bob Johnson.

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After celebrating the quantitative easing programs just last week, markets reacted to a series of economic reports that showed some slowing in economic data late this summer. And yet another bellwether stock, this time  Caterpillar (CAT), adjusted its earnings forecasts, which didn't help market sentiment.

In economic news, home prices were up, weekly retail sales increased nicely, and initial unemployment claims fell sharply (though maybe not sustainably). However, new home sales took a pause between August and September, durable goods orders were trashed by airline orders, and income and consumption numbers were hit hard by a quick spike in inflation rates. More noise out of Europe, particularly the riots in Spain, didn't help matters, either. With QE3 already on the books, this week's bad news was, well, actually bad news for a change.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.