Daily Market Update – July 17, 2014




Daily Market Update – July 17, 2014 (8:15 AM)

Yesterday’s big news, as the banks took a quick break from earnings reports, until this morning’s positive report from Morgan Stanley, was the news that Rupert Murdoch was seeking to buy Time Warner.

The analysis of the situation seems to point out that doing the right thing may have bad consequences for some.

In this case it was a question of relatively new Time Warner CEO Jeff Bewkes doing the right thing by spinning off or selling non-core assets changing the company from a media conglomerate to a pure entertainment business.

That’s what may have made it more appealing for someone like Rupert Murdoch during an era when the likes of Comcast and Verizon are getting bigger and bigger. It becomes a battle of survival between the owners of the content andf those that get the content to consumers willing to pay ever large increasing amounts for content.

In the short term mergers and acquisitions fuel the market, but they are also cause for some concern, as someone so wisely posted yesterday, looking back at some of Murdoch’s previous high profile buyo-uts.

At what may be a $100 billion dollar deal this one is certainly a high profile deal and is definitely reminiscent of the timing of the ill-fated Time-AOL deal.

In the meantime after some decent gains yesterday the European markets are again weak, as they were last week following concern over a Portuguese bank.

This time there’s not much identifiable for the weakness, but it’s looking to work its way to our shores as the pre-open trading, while improving from its early lows, was on track to erase yesterday’s gains.

With next week’s options become available for those with weekly options but not expanded weekly options, some additional rollover opportunities begin with today’s trading and hopefully some will open up before tomorrow’s close, in an effort to make something worthwhile this week.

While last week was exceptionally busy without having added too many new positions, so far this week is a polar opposite, with scant trades in any category. While there are still positions where rollovers or assignments can still potentially occur it would be nice to hav
e a continuation of yesterday’s market and some continued upside to make the potential become a reality.

Even though it’s difficult to keep up with a market that moves more than 1% higher in any given week, sometimes those moves are necessary to be able to execute the kind of trades to keep the cash flowing.

Lately the market, while not setting the world on fire, even while still setting new record highs, has continued to be incredibly resilient to any challenges, so overseas weakness and Murdoch’s profligacy may simply be momentary speed bumps.