Futures vs FV: SP +9.74; DJ +99.29; NASDAQ +31.49
Futures gapped open in the early session and have held the gains toward the open. Nothing but net in terms of news (sorry for the basketball reference during the World Series).
M&A: T/TWC. COL/BEAV. AMTD buying Scottrade. China Oceanwide buying GNW
EU PMI's better than anticipated
EU PMI: 53.5 VS 52.4 VS 52.2
Germany PMI: 55.1 vs 54.3 vs 54.3
France PMI: 51.3 vs 50.0 vs 49.7
Fed: Four speakers Monday. Bullard already talking and saying that low interest rates will be 'the norm' for the next 2 to 3 years
Earnings Misses: Seem to be just reporting misses today. VFC (TL and BL); KMB (TL, BL)
GS: Downgrades corporate earnings through 2018
Internet Outage: Reports are a Chinese firm used internet connected security cameras to cause the denial of service outage. Next it will be refrigerators, home & business thermostats, smart TV's, etc. Too many vulnerabilities as neat ideas to help your life have outrun the thought that they could be used against us. Perhaps some kind of Y2K kind of frenzy is necessary to harden these openings before it is too late?
OTHER MARKETS
Bonds: 1.737% vs 1.73%. Bonds were a bit stronger but have faded that modest early bounce.
UER/USD: 1.0884 VS 1.0884
USD/JPY: 103.92 VS 103.80
Oil: 50.38, -0.47. Oil is lower because Iraq is holding out on the production cuts.
Gold: 1271.10, +3.40
Futures are holding fast at the session highs as the financial stations (those that are still actually covering financial news versus the election) hash and rehash the intricacies of the proposed mergers. Mergers always hype up the animal spirits in the market with the 'who will be next' frenzy.
Thing is, the reason they are merging is to be able to compete. Our tax and regulatory schemes are not conducive to competing with companies from other countries. Thus they combine to get competitive. Some in the government want to block them saying they are not good. They may not be, but that does not address the heart of the issue: WHY are they combining. Fix those problems and you fix the worry of big companies combining to be even bigger. Of all the candidates, only Johnson (no relation) has the proposals for that. Great, a 3rd party candidate with 7% to 9% in the polls is the one addressing the heart of the issues.
None of that really matters for the open and likely all of today. Some big mergers are announced, that raises the hope/hype for more, all valuations are pushed higher.
We wanted to get in on some GOOG. It is set to open about 4 clicks higher. Not too bad. On these days there may not be a lot of give back of the opening price. Always a possibility, but with 4, count 'em 4, deals out there, that is a lot of excitement.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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