Merger Mondays are back!

Years ago traders became so used to hearing about merger activity conducted over the weekend that it seemed each Monday was carried the moniker of “Merger Monday”. Today is reminiscent of those days with 4 big deals hitting the headlines.

  • AT&T (T) confirmed the rumors from last week that it is making 85 billion dollar bid for Time Warner (TWC). The deal is expected to face harsh regulatory scrutiny and the TWC share price reflects the market’s doubts that this announced deal will be finalized.
  • Aircraft component maker Rockwell Collins (COL) 6.4 billion dollar deal for B/E Aerospace (BEAV)
  • TD Ameritrade (AMTD) announced intent to bid 4 billion for Scottrade which is privately held
  • and a Chinese conglomerate HNA Group, is paying 6.5 billion for a 25% stake in hotel chain Hilton (HLT) which it is buying from Blackstone (BX) a private-equity company.

Merger activity can have a positive impact on the macro market psychology as well with the thought process being if Company A believes Company B’s current stock price is a compelling value, maybe the entire market is likewise a value… Now you have to factor in that oftentimes the acquiring company is using their stock as currency for a purchase then you could land on thinking that Company A believes their own share price is highly enough valued to spend. This all comes back to the final truth in securities trading which is for every buyer there is a seller. With mergers remember that the trade has not occurred at the announcement of a deal, far from it. There is a long process involving required regulatory approvals both here and many times abroad and shareholder approvals needed at a minimum. But merger Mondays certainly get the excitement level ramped up to start the trading week!

This week, the earnings parade continues to gain momentum! You can quickly tell by how full the OptionsHouse Earnings Calendar is this week.

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The heavyweights include:

In Technology:  

Apple (AAPL) on Tuesday after the market close (AMC)

Alphabet (GOOG) and Amazon (AMZN) on Thursday (AMC)

Industrials:

     General Motors (GM) and Caterpillar (CAT) Tuesday before the market opens (BMO)

     Boeing (BA) Wednesday (BMO)

     United Parcel Service (UPS) Thursday (BMO)

Staples:

     Procter & Gamble (PG) Tuesday (BMO)

     Coca Cola (KO) and Mondelez Intl. (MDLZ) Wednesday (BMO)

     Dr Pepper Snapple (DPS) and Hershey Food (HSY) Thursday (BMO)

Energy:

     Exxon Mobil (XOM) and Chevron (CVX) on Friday (BMO)

 

So there are plenty of chips, soft drinks and chocolate company earnings to snack on this week while you hop on the Cubs bandwagon and their quest to erase 108 years of frustration!

Hopefully we all can fly the  “W” flag for the market and for the Cubbies this week!picture1-1

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