So far in September, investors have gotten just about everything they've wanted from policymakers. Over in Europe, news that the European Central Bank would potentially provide bond-market support for nations with weaker economies sent stocks soaring around the world. Not only did the Dow Jones Industrials (DJINDICES:^DJI) jump 245 points in a single day, but they also reached their highest levels in nearly five years. And with the Dow up another 90 points as of 2 p.m. EDT today, they're on track to set yet another multiyear record.
Now, many investors expect that the Federal Reserve will join the party by implementing a third round of quantitative easing. But not all companies stand to gain as much from QE3 as others. Judging by their past reaction to strong economic policy moves, the following three stocks could benefit the most if the Fed pulls the trigger.
Bank of America (NYSE:BAC)
Already this month, B of A has seen its stock rise 7.5%, reflecting the palpable relief that the ECB's move had on the bank and the entire financial industry. But a move from the Fed could have an even greater impact on B of A, simply because the bank has more direct exposure to the U.S. economy. If QE3 successfully helped spur economic activity, then B of A has plenty of potential to take advantage, with recent sales of assets having bolstered its capital and given it more capacity to make profitable loans. Even with shares already up about 60% on the year, Bank of America could easily rise furhter if QE3 becomes reality.
The aluminum giant has enjoyed a near 6% jump in its stock so far in September as the ECB's move, combined with a stimulus package in China, finally got the industrial metals industry out of its funk. Still, the global economy has a long way to go before it can convince investors that fears of a slowdown in emerging-market growth and a possible recession in Europe are overblown. If QE3 succeeds in encouraging industrial activity in the U.S. and around the world, then Alcoa's cheaply priced shares have plenty of room to run.
JPMorgan Chase (NYSE:JPM)
JPMorgan's shares have risen more than 4% this month, as it benefited from many of the same positive trends that sent B of A to the top of the performance charts. JPMorgan hasn't struggled with capital constraints to nearly the extent that B of A has. Before the company's London Whale trading scandal, many saw JPMorgan CEO Jamie Dimon as the pre-eminent leader of the entire industry. Yet even with his reputation a bit tarnished, Dimon has the capacity to lead JPMorgan forward, and the favorable financial conditions that would likely result from QE3 should only help the bank going forward.
Wait and see
Of course, markets are unpredictable, so it's always hard to tell what the immediate reaction to a big news event will be. In the long run, though, if the Fed moves to stimulate the economy once more, these three companies look well-poised to take maximum advantage.
Fool contributor Dan Caplinger owns warrants on JPMorgan Chase. The Motley Fool owns shares of Bank of America and JPMorgan Chase. 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.