Editor's Note: Todd posts his vibes in real time each day on
Buzz & Banter
Good morning and welcome back to a flickering pack. I was
out-of-pocket last week, enjoying a few days with my family in San
Diego before returning to the East Coast on Wednesday for some
non-trading work matters.
I tried to take a legitimate break from the tape but kept abreast
of the top-line headlines as old habits are hard to break. While
(INDEXSP:.INX) declined a grand total of 44
during the five-session span, there was plenty of motion under that
Some top-line vibes, in no particular order:
- The US Attorney of the Southern District of New York issued a
five-count criminal indictment of SAC Capital Advisors -- the
firm, not the founder -- including four charges of securities
fraud and one charge of wire fraud. While many Street insiders
(with knowledge, not information) believe Stevie himself is
untouchable (plausibly deniable), the indictment of the
is a new twist. I wrote on Twitter last Friday that I "Openly
wondered if we'll look back at SAC as a watershed moment for the
market through the lens of lost Wall Street commission and
counter-party risk," which was precisely
what Gretchen Morgenson wrote about
New York Times.
- China continues to walk a very fine line between bottom-line
growth and restructuring the economy as they order a nation-wide
debt audit; the Shanghai Composite is down 13% for the year. The
(INDEXNIKKEI:NI225), for its part, is down 7% the last five
sessions, although it's still 31% higher (16% in dollar terms)
year-to-date. The outcome of "Abenomics," much like the Greenspan
Put once was and
the Bernanke Call
currently is, remains an open question.
- We've seen a spate of multi-billion-dollar deals;
Omnicom Group Inc.
) agreed to merge in an all-stock deal to create the world's
largest advertising company with $23 billion in revenue.
) also agreed to buy
) for an oh-by-the-way $8.6 billion. As
often says, when it comes to M&A, you buy when you can, or
when you have to.
) had a great
last week, popping 30% on earnings as they seemingly took solid
steps to solve their mobile advertising conundrum. I've been
involved in this stock both ways this year, but I wasn't there
for this move. I'm reminded of a theme we spoke of some time ago,
"Alpha Bits," which seems to be in full effect this year. Go
figure; the world embraces index funds and stock-pickers have
their day in the sun.
All in all, the market was extremely resilient last week; it had
several opportunities to sell off but it held its ground in thin
summer trading (it's hard to put the "volume litmus test" to work
during this slow summer period, but the reaction to news is always
more important than the news itself). Meanwhile, Americans are more
confident about the economy than at any time since July 2007,
according to the University of Michigan, as we're smack-dab in the
what Jeff Saut and others describe as a seasonal danger
For my part,
I've got a few shekels on the snake eyes
respecting both sides of the market ride.
Good luck today.