Daily Market Update – March 25, 2015 (Close)
Yesterday reverted back to recent form after having spent a couple of hours of the trading day looking as if it would simply be as flat as was the pre-open futures.
Instead it was another triple point move. This one was to the downside and was a continuation of the sell-off that happened on Monday afternoon that saw the DJIA give up its gains in the final 15 minutes of trading.
Today did not revert back to form, because if it had, it would have been an up day. Instead, it was an abysmal day that only got worse as it progressed, with the DJIA off almost 300 points.
This morning looked like it will be another flat open as the futures were doing almost nothing despite some excitement from the impending Kraft Foods deal. The fact that interest rates are still so low would make you think that more deals might be on the horizon, although it may be hard to justify the stock prices at these levels. Even for those companies that are sinking below 200 day moving averages are still pretty expensive for those looking for bargains.
That goes even for someone just looking to pick up 100 shares, although most things did get a little less expensive today.
Still, some increased activity would be welcome and they don’t all have to be blockbuster kind of deals, such as with Kraft Foods. Just look at yesterday’s announcement of a relatively tiny $1 Billion deal that Lexmark was undertaking in buying a company that I’d never heard of, but coincidentally also starts with the letter “K.”
Both of those companies appear to be getting pats on the back this morning, so there may be more, especially as Lexmark hasn’t exactly been the kind of company on the acquisitive prowl over the past few years, but opportunity is opportunity.
The real focus for the rest of the week will still be on Friday’s GDP release, although this morning’s Durable Goods could have potentially given the markets either a reason to celebrate or to fear that the news was a harbinger for impending interest rate hikes.
Instead of suggesting that the manufacturing portion of the economy was humming along those Durable Good numbers threw some cold water on the idea of any real economic expansion brewing.
But despite the absence of good news or the presence of bad news, depending on how you interpret the Durable Goods Report, it had no real impact on today’s trading.
At this point we don’t really know whether the market is going to view good news as good news or whether it’s going to take that paradoxical approach that it often does.
As the Durable Goods figures were released the futures did virtually nothing, befitting a market that may still find itself confused over what it wants to hear.
For the rest of the week I don’t see very much in activity, although it ended up being hard to resist a position in Activision which was going ex-dividend tomorrow. Since it has an annual dividend if it can be assigned quickly that will end up being much better than the 1% yield it offers on a yearly basis.
While I was wishing that today would be a very passive and watchful day, just like it was yesterday, that obviously wasn’t meant to be.
Hopefully tomorrow will bring something different as time is running out on this week and the chance to roll anything over.