The grand experiment to save the US economy has completed its first phase. It has been more than six years and $3 trillion dollars later… Quantitative Easing (QE) is over; long live QE3.                                              

The Federal Reserve balance sheet muddled about $800 billion dollars before the bank crisis, which now stands near $4.5 trillion. Of course, it will be debated for years to come whether anything was done with these extraordinary measures, or what it did for this nation.

A few years earlier, they saved banks and allowed government spending to climb to unthinkable levels.

Let the guessing games begin. With this phase of accommodation coming to a close, when will the Fed hike interest rates? Some of the key language point to “solid gains” in labor and inflation, and then the Fed “running below” their objective. However, some feel the Fed opened the door to a hike sooner rather than later.

I am convinced that it will be September or December of next year with extraordinary data, perhaps forcing the issue. Let's face it, the United States economy was laid out to be resilient and tough, but it is nowhere near firing on all cylinders.

I suspect earnings and data like the GDP will determine where the market goes until next Tuesday (midterm elections) and Friday (jobs report).

After the Bell

Visa (V) posted its financial results after the bell. Perhaps, the Fed's handiwork is having an impact as Americans used credit at a much faster pace than debit. Debit has been the top form of plastic since 2007, just as the nation was barreling into the Great Recession.

The world has picked up the plastic habit, although none uses it nearly as often as Americans do for payments, but rather transactions.

Americans who use credit cards are an important component of Fed policy, but it is about big-ticket items, namely homes, that anchor the economy. Cheap money means nothing, but soon, mortgages with 3% down may shift the tide... It's a dangerous path, but when more than $3.0 trillion was added to the Fed's balance sheet, caution was thrown to the wind a long time ago.

Today’s Session

Equity futures have been under pressure all morning long, but not the kind of pressure that says panic. Instead it reads a dollop of confusion and a dollop of angst over what the cues should be and how investors should react.

News out this morning corroborate the Fed's decision with initial jobs claims still trending in the right direction. The big economic news of the morning is that the GDP report which, on the surface, vindicates the Fed's move yesterday, and paints an economy moving full steam ahead to better health.

The thing about third quarter GDP is beneath the surface. There are areas that leave more questions than answers.

• Consumers spent less than expected and savings rate inched higher.
• Business investment while more robust than Main Street came down sharply.
• The Federal government is spending big time with a big spike in defense outlays.

Imports fell 1.7% for the quarter, however, exports rose 7.8%.

Another positive item were the earnings results from Corporate America. With the price of oil decreasing and worries from overseas, they have not had a strong impact on equity futures just yet.

* = Open WSS Idea         **= Dow Component