As expected, volumes remain light as another snow storm yesterday kept the A-Teamers on the slopes and the B-Teamers at their trading desks deciding what kind of food to order in for lunch. Pizza or Chinese? In the meantime, the markets, much to my surprise have advanced rather than flat line or decline slightly during the holiday / vacation week. No complaints here as we remain fully invested. As of yesterday’s close, the S&P 500 (SPX) has rallied back quite smartly from its New Year’s correction and now stands within 10 index points of its all-time high. When the A-Teamers return next week, I expect that to be breached, at least on an intra-day basis.
Traders’ Eyes Will Be Focused on the Hockey Ice
The B-Teamers will have four exciting semifinal men’s Olympic hockey medal rounds games to enjoy today. When the USA team faces off at noon today versus the Czech Republic on Comcast’s (CMCSA) USA network, expect all eyes to be on the TV and off the markets. They might take a pause for the release of the January FOMC meeting minutes but after that it will be back to hockey. My picks for today are Sweden over Slovenia, Finland over Russia in an upset, Canada will obliterate Latvia and the USA will be triumphant over the Czech Republic.
Investment Bankers Remain Active
In the meanwhile, investment bankers have had to cancel their vacations. Besides the Comcast deal to buy Time Warner Cable (TWC) announced at the end of last week two more deals have sprung up. First was the $25 billion acquisition of Forest Labs (FRX) by Actavis (ACT) yesterday and today’s delayed Valentine’s Day gift whereby Signet Jewelers (SIG), owners of Kay Jewelers and Jared the Galleria of Jewelry will purchase the mall based jeweler, Zale Corporation (ZLC) for $21 per share or $1.4 billion. Expect some pin action for Blue Nile (NILE) as speculators try to guess the next takeover. By the way, since the 1980s hey days of mergers & acquisitions that has not been a winning strategy.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC had no positions in stocks mentioned — although positions can change at any time.
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