Wednesday, August 22, 2007

Technical Difficulties

I'm fighting a nasty cold (thanks to my kids, who carry this stuff like the Outbreak monkey), so I was running a bit late this morning. It was nice to see the markets off to a good start when I got in, but Blogger was down and I couldn't post.

Anyway, you know that I don't like strong market opens, but I was pleased to see this morning's news. There was renewed dealmaking and M&A activity, which is pleasing to investors.

First, there is chatter that TD Ameritrade (AMTD) and E*Trade (ETFC) may merge. I think that would be great. Second, NYMEX (NMX) is confirming it is in takeover talks. Maybe ICE? Third, Rio Tinto (RTP) raised a record-breaking $40 billion to fund its proposed buyout of Alcan (AL). So there is funding available. And last, Dubai World is reportedly investing $5 billion to buy a nearly 10% stake in MGM Mirage (MGM).

The above should allay fears that M&A activity was dead and no more deals were going to get done. I have been saying that I felt the dealmaking was just on hiatus, and that it would return after more market participants got back into full speed after Labor Day.

Asian markets were up across the board overnight, as the calming here in the U.S. emboldened buyers overseas as well. The International ETFs are up a lot this morning. Also, the Yen is moving lower, a big positive for the carry trade fears.

Oil is still trading below $70, a psychological positive, and gas prices are trending lower as well. Bond yields are steady, with the 10-year at 4.65%.


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