Morning Market Thoughts: Mergers and Acquisitions are Leading the Markets Today
Looks like we are setting up for an exciting week! Huge merger and acquisition news, Fed decision on Wednesday, and Morgan Stanley
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PowerRating) is calling for bank earnings to fall a whopping 26% this year. Let’s take a look at this week’s events and how they may affect the DJIA and SP E-Minis.
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Right now, the YM and ES are nicely higher, however well off their highs. The M&A news of Buffet and Mars Inc. offering $23 billion for Wrigley
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PowerRating), and Microsoft
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PowerRating) vying to take over Yahoo!
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PowerRating) are all weighing in on the index futures this morning, and should for the first half of the week. In my opinion, Morgan Stanley bank earnings projections will FORCE the fed to cut rates at least 1/4 on Wednesday. If the fed stops easing, the bank earnings will fall much more, which could easily turn into an economic nightmare- my bet is the Fed will continue easing to mitigate any further potential damage.
The YM is selling off a bit here; it is off its highs by about 40 points but still nicely up this morning. I have a strong upward bias this morning and suggest trading off of the following channel 12923-12817. Remember, stay flat in the middle, long above and short below.
Gold appears to have lost its luster as an apparent downtrend has begun. 877 looks like strong support, if your not short already, when 877 looks like it may be a good short entry. I am still standing behind my call of 600 area by 4.1.2009.
Various adverse world events continue to push OIL higher. The bullish news seems to be non-stop. Oil will be a great short soon, just be patience and wait for the perfect setup. I’ll continue to let you know my thoughts in this regard.
Dave Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.