| Monday's Headlines 1. S&P 500 Surpasses All-Time High 2. Earnings Keep Surprising Higher 3. Merger Rumor Mania Sends Stocks Soaring 4. Prohibition's Birthday Markets Closed
 Image: Getty Images
Markets Today
As the great Phil Collins sings, "I can feel it in the air tonight..."
You could just feel this stock market record ready to fall early last week as corporate earnings showed signs of optimism and trade talks seemed friendlier. With a probable interest rate cut coming this Wednesday, and the Fed continuing to back-stop banks with more liquidity, investors had little to fear, so they bought stocks.
The result, a new all-time high for the broader market, the first new high since July 26, 2019. The S&P 500 closed above that magical 3,000 point resistance level on Friday, and today, pushed 0.56% higher or 16 points to close at 3039.42
Monday's move to a record high extended the second-longest ever bull market to 3,885 days, by far the second-longest ever, according to data from Bespoke Investment Group.
The DJIA is within striking distance of all-time highs, but has not had the same momentum as the S&P 500, which is a market cap weighted index as opposed to a price weighted index. Big stocks like Microsoft, Apple, and Amazon with huge market caps, have an enormous influence on the overall performance of the S&P 500. They can boost it higher when they are rallying, or drag into a dizzying spiral when they falter.
Here's the S&P 500 against the DJIA and the Russell 2000 since the beginning of the year, courtesy of YCHARTS.  Best Day of the Year for Stocks This could just be a coincidence, but you can't fight history. Not only is October historically the best month of the year for stocks, October 28th is the best day of the year too.  According to LPL Financial, from the end of October to the end of April represents the strongest period of the year for U.S. markets. Last fall's selloff likely bucked that trend, although U.S. markets sprinted to a 20% return in the first three months of 2019 as the Fed reversed course and become more dovish. I wouldn't recommend making any investment decisions based on the chart above, but check it out and see what historically happens to stocks on your birthday.
Earnings Hits and Misses Walgreens (WBA), AT&T (T), and Spotify (SPOT) are among the companies that reported stronger-than-forecast profits on Monday.
Even Beyond Meat (BYND), maker of plant-based protein, reported better earnings than expected. But that didn't stop investors from continuing to sell the stock, which is down 15% in after hours trading. After reaching a record high on July 26th, shares of BYND are down 55%, and seemed poised to fall further despite some recent partnerships the company has inked with Burger King and others chains. The lock-up on the IPO shares expires tomorrow which could set off a flurry of selling as insiders try to cash out on their stock options and share grants.  Alphabet's Hits and Misses on Earnings Shares of Google's parent company fell about 4% in after-hours trading as earnings per share came in lighter than expected. Revenue, at $40.5 billion, was basically in line with expectations. Paid clicks, which is where Google makes most of its money, slowed considerably, with a year-over-year growth of only 18%, versus 62% the same time last year. However, the revenue it gets from each click, called "cost-per-click" only fell 2%, versus the 28% slide over the same period a year ago.
Google is still a giant in online advertising and search. Whether it's on Google.com, the mobile app or YouTube, it controls nearly 50% of all U.S. ad spending. Today's earning miss is not going to slow the company down.
chart courtesy eMarketer  Google Looking to get into Shape? Shares of fitness tracker company Fitbit (FIT) soared over 30% today on multiple reports that Alphabet/Google is making a bid for the company. The San Francisco based company only has a $1.5 billion market cap (even with today's 30% rise), so Google can basically pick it up on a coffee run with the loose change it has in its pockets.
Google already has Google Fit, it's fitness tracker that connects to multiple apps. But it doesn't have its own fitness device to compete with the Apple Watch or the Garmin devices.
As Apple's Tim Cook is fond of saying, the future of the company is in helping its customers live healthier lives. Monitoring and tracking its customers health is a smart way to turn them into life-long customers. Google wants that, too, and will get in the game by scooping up Fitbit, which already has over 26 million active customers.
image courtesy fitbit.com  Tiffany Soars on LVMH Merger Rumor Fitbit wasn't the only company boosted by buyout rumors today. Shares of Tiffany spiked 30% as luxury giant LVMH confirmed it is interested in buying the company behind the 'little blue box'.
LVMH, which is run by billionaire CEO Bernard Arnault and owns brands such as Louis Vuitton and Christian Dior, confirmed its interest on Monday following reports of an offer over the weekend. Tiffany (TIF) confirmed Monday in a statement that it is reviewing an all-cash proposal from LVMH to buy the company for $120 per share. That's a premium of more than 20% over the stock's closing price on Friday.
Tiffany has been around since Charles Lewis Tiffany founded the jeweler in New York City in 1837. It's one of just a handful of luxury brands that has managed to survive and thrive throughout all kinds of market cycles. This merger makes sense.
image courtesy be.tiffany.com 
(chart courtesy YCHARTS)  Luxury brand Tiffany & Co gained a whopping 31.6% today after luxury brand conglomerate LVHM announced they were buying Tiffany, see above for details. Other gainers include asset manager Affiliated Managers Group, biotech firm Illumina, and Tyson Foods, which gained 5.5%, 4.6%, and 4.6% respectively.  Logistics real estate investment trust (REIT) Prologis dropped 5.4% today on the news it was going to purchase rival REIT Liberty Property Trust. Beverage company Molson Coors Brewing dropped 4%, and energy company Cabot Oil & Gas dropped 3.6% Word of the Day Merger arbitrage, often considered a hedge fund strategy, involves simultaneously purchasing and selling the stocks of two merging companies to create "riskless" profits. A merger arbitrageur reviews the probability of a merger not closing on time or at all.  Today in History October 28, 1919 Today in 1919 congress passed the Volstead Act, the enforcement mechanism for the 18th amendment which banned the "manufacture, sale, or transportation of intoxicating liquors." This was the culmination of the prohibition movement which had been building in the US since the early 19th century. The act was ultimately unsuccessful and proved unpopular enough that the 18th amendment was repealed in 1933.
Source: https://www.loc.gov/item/today-in-history/october-28
How can we improve the Market Sum? Tell us at marketsum@investopedia.com
Enjoy the Market Sum? Share it with a friend. Or share the link below to invite friends to sign up.
CONNECT WITH INVESTOPEDIA
Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here.
114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC. All Rights Reserved | Privacy Policy |
Monday, October 28, 2019
Record Highs
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment