Mitchells & Butler, Mitsubishi, Medtronic, Orchid Group, Siemens, San Dusk, Aquila, Mineral Covidien, and Fusion all are mixing it up with mergers and acquisitions. This reality is a good sign for the market, even as Iraq presents the market with yet another geopolitical “crisis.”
- The question of the day is if geopolitics in Iraq will become the next “crisis” the stock market will have to deal with.
As the gate opened this morning, it appeared as if the market would succumb to the news coming out of Iraq – insurgents marching on Baghdad, etc. etc. etc. Yet, here we are, all the indices are in the green. This includes the Russell 2000 (RUT), the small-cap index that is a metric for the overall market, at least in my mind.
- With the Nasdaq 100 and S&P 400 joining the Dow and S&P at new highs, only the Russell 2000 is left to join the party.
Recently, the small caps have made a comeback and they appear to be building a head of steam. In fact, the RUT is working its way back to record-high territory, which is a mere 45 points or so away. This is only a 4% move, approximately. Money is flowing back into the higher-risk stocks. Mind you, it can turn around, but for the moment, the Iraq “crisis” is not negatively affecting the money flow.
- Investors in U.S.-based funds committed $10 billion to stock funds in the week ended June 11 after adding $3.7 billion to the funds the prior week, data from Thomson Reuters’ Lipper service showed on Thursday.
The above signals a money flow not seen since February, you know, way back when the emerging market crisis was giving way to the Ukraine/Russia crisis. The flow might slow this week because of Iraq, but my guess is it will continue. Most folks hate to miss the boat when the tide is rising.
- Chipmaker Intel Corp on Thursday raised its outlook for the second quarter and the full year, citing stronger-than-expected demand for personal computers used by businesses.
I guess Intel’s revised forecast points to the money flow among businesses. Mergers, acquisitions, expansion, and growth – corporate money is flowing and when money is flowing, good things happen, especially in the market.
- The Federal Reserve reported that U.S. Industrial Production for the month of May was reported at +0.6%, which was above the consensus expectations for +0.5% and well above last month’s reading of -0.3%.
- The nation’s factories reported that Capacity Utilization came in at 79.1%, which was also above the expectations for a reading of 78.9% and last month’s reading of 78.6%.
- The Empire Manufacturing Index – one of the more closely watched indicators – was reported at +19.28 in June. This was well above the consensus for a reading of +15.0.
Manufacturing is improving, employment is rising, the services sector is growing, money is moving, and the Russell 200 is finding its way back after the recent momentum-stock panic. Despite Iraq, I like the current market environment.
I also like longer-term market environment. Yup, the future is rife with possibilities as the economic transformation keeps on trucking.
- Panasonic reveals a design that surpasses a 20-year-old mark for solar cell efficiency.
For a Monday, today is not so bad. Yup, if the market holds in the green, or it keeps its losses to a minimum, it will be a good way to start the week. After a taxing weekend, I could use a good start to the week.
Trade in the day; invest in your life …
