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Bernanke is out of bullets. Anyone who can’t see that by now is not familiar with the Japanese history of QE or the most recent impacts of QE (Ben clearly didn’t save the economy with QE1 or we wouldn’t even be having this discussion). He says he will cut interest on reserves or alter the language in his speeches – total non-events in my opinion. They might get the market all excited for a few hours, but soon people will realize that none of these actions will actually fix the recession on Main Street.

Aside from all the jawboning out of the Fed, there was some actual market moving news Friday. Intel cut its Q3 earnings. According to the AP:

“Intel said it now expects revenue of $10.8 billion to $11.2 billion for the fiscal third quarter, which ends in September. That compares with a previous forecast of $11.2 billion to $12 billion.

On average, analysts surveyed by Thomson Reuters expected $11.5 billion.”

This is big news in my opinion. Not only are semiconductors economically sensitive, but Intel has been crushing estimates quarter after quarter for almost two years. As we mentioned the other day, we could be at a crucial turning point where the economy is slowing substantially and analysts estimates appear high. If Intel is any early indication it would seem to verify this thinking which means we are likely to see more warnings and a lot of analyst cuts in the coming months. Earnings are the linchpin holding this market together. A decline in earnings will certainly put pressure on the markets.

Source: Intel Earnings: The Only News That Mattered