Can the Fed Fuel the Dow Today?

Updated

The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Isaac Pino discusses topics from around the investing world.

In today's edition, Isaac addresses the market's recent downturn, including four straight negative days for both the Dow Jones Industrial Average and the S&P 500 indexes. Yesterday, the Nasdaq declined the most, slayed by the second-quarter results of chip maker AMD. Expecting 3% in top-line growth, AMD instead reported an 11% drop in revenue.

Still, with the minutes of the Fed's latest policymaking meeting minutes released this afternoon, can shareholders expect a catalyst toward the day's end? Perhaps, but don't bet on its sustainability. With each passing announcement of another round of quantitative easing or continuation of Operation Twist, the Fed's actions seem to carry less and less weight. On top of that, a survey of top analysts on S&P Capital IQ reflects pessimism over corporate earnings this quarter. Find out in the video below why the Dow could be in for a roller-coaster ride right up until the election.

While Isaac believes the U.S. GDP will experience minimal growth for several years, there's no reason to run for the hills. Instead, investors should prepare for a paradigm shift where the U.S. once again becomes a strong exporter and less of a consumer-driven economy. The Motley Fool believes there's a few stocks that could drive this "insourcing" trend for the decades ahead. We outlined each of these in our brand-new report: "The Future Is Made in America." To find out about the technology that could disrupt the "Made in China" era, simply click here.

At the time thisarticle was published Isaac Pino has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement