Monday Morning Musings

The markets capped off a very positive week with a strong close on Friday. Growth stocks and the Nasdaq were the week's best relative perfomers. This morning, the markets are opening under a bit of pressure following another big selloff in China.

The Shanghai Composite plunged -8.3%, on top of last Wednesday's drop of -6.5%. That is some extreme volatility, but not out of the ordinary when you are talking about the kind of bubble we are seeing in China.

What is interesting is that many of the other major indexes in Asia shook off the action and took it in stride. Both the Nikkei and Hang Seng actually finished higher on the day. Last week, the U.S. market also shook-off the "Shanghai Surprise" and closed higher by the close. We could see the same thing today, although a normal bout of profit taking makes that call tougher.

There was some M&A news this morning, as you would expect, but nothing of the blockbuster variety. Flextronics (FLEX) is buying Solectron (SLR) for $3.6 billion. Both of these names are blasts from the past, and can probably benefit from the consolidation.

Crude oil prices are higher, pushing back above the $65 level. Bond yields are slightly lower, with the 10-year at 4.94%. Gun to my head, I think stocks will finish mixed today.