MARKET COMMENT
January 29, 2007
The major markets moved up slightly on the strength of
M&A activity given all the liquidity sloshing about the globe.
The litany includes Friday’s late
announcement by BAC exploring acquisition of Country Wide, and today C buying a
British online bank [Egg], ML buying FRC, perhaps a large BMY acquisition by SNY
and a combination of newsprint companies ABY and BOW.
Need a score card?
Along those lines I watched with interest a Bloomberg
interview with notorious LBO whiz Carl Icahn who,
while discussing his views about splitting-up TWX, also noted that he felt 20%
of the S&P 500 were ripe for either LBO’s or
private equity deals.
And, you know
something?
There’s enough liquidity
chasing deals nowadays maybe it could be done!
Last year alone it’s reported that thru stock buybacks and deals there
is $600 billion less shares in float than the previous year.
An interesting muse is here by 24/7 Wall St. that
ponders the breakup value of several dozen companies with market caps of
$10-100 billion.
It’s just speculation
of course, but you get the idea as to the M&A fever.
We’re on earnings, Fed and deal watch.
Today was fairly quiet day, but commodity
markets had a pretty rough day.
Base metals were weak including Aluminum and Copper [which
appears to want to test the $2.50 area “again”].
And grains were weaker with profit-taking in corn, wheat and
the soybean complex.
An important story which may be having some psychological
impact on crude oil markets is contained in this NY Times article here
that outlines the argument we mentioned last week that the Saudi’s may be
driving the price of oil back toward $50 for a variety of reasons that the reported
outlined in a convincing manner.
What is it about homebuilder’s bulls that make them buy
every piece of crummy news?
Today the
news couldn’t have been any worse as the number of vacant homes for sale [story
here] rose at the fastest rate ever recorded!
Market moving issues today were interesting since there wasn’t
much news to account for their behavior at least from Asia.
Many Latin American markets were weaker perhaps on news of
low commodity prices and higher US
interest rates.
It was relatively quiet today featuring weakness in some
Emerging Markets, commodities and deal makers.
There will be more to discuss as the week unfolds, more earnings are
announced, deals are made and the Fed chimes in.
Now, just for fun, what does this headline
from MarketWatch mean??
Have a pleasant evening.
Disclaimer:
Among
other issues, the ETF Digest maintains positions in:
KCE, GLD, FXI and ILF.