Positions
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+100 GS @ 74.98, cost @ 74.79, stop @ 70
+1000 UCO @ 8.46, cost @ 6.70, increase stop to 7.70
Monday Morning Blues
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Asian market were crushed overnight as bank woes persisted. Weakness carried over to Europe and caused early gains to evaporate. US equities have had a seesaw session thus far as early losses turned to sizable 1% gains and back to flat again. No confidence, skittish buying.
Non-financial Acquisition
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Big news of the day - Merck's $41B takeover offer for Schering-Plough (SGP) in pharmaceutical space. As expected, Merck's shares are taking a beating (-10%), and SGP's shares are up (+14%). This is a big deal for me personally and I don't have beneficial interests in either company. Acquisitions have dried up significantly (nearly zero) since their 2007 boom and this deal is encouraging. I'm not expecting a Butch Cassidy, gun-slinging type consolidation wave but when valuations are so attractive, it is hard for solid companies to resist these low-priced blockbusters. It is exactly this type of activity that I believe may help form an equity market bottom. Let's just say this is a good start, unless of course the deal falls apart or gets rejected. When enough non-financial companies take advantage of very low valuations, the retail investor may finally regain confidence to turn over their mattresses and slowly re-enter the market. Joblessness will continue and economic growth will stagnate, but much of this is already priced into this downtrodden market.
Live from Queens,
I'm thinking happy thoughts
TM
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