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Daily Market Update – October 24, 2016 (7:30 AM) This has the potential to be a very big week. It already had that potential before, considering all of the earnings reports that will be flowing in and the week ending GDP report. What was added to the equation was the blockbuster $85.4 Billion deal and some smaller ones that were announced over the weekend. What that means is that buyers may believe that there are still some reasonably priced items out there, especially as the window for cheap money may be closing. Also, if the GDP comes in better than expected, especially if it also includes some upward revisions, the seal on the FOMC deal to raise interest rates may become validated. What that means for investors is unclear, but as afraid as they are of increased interest rates, they are probably even more fearful of the game being played and the uncertainty hanging over their heads. The big news for the week may continue to be that huge buyout and all of the speculation regarding regulatory issues and whether it all makes sense, with an eye cast back to the last time Time Warner was in play. That didn’t work out too well, but I think this time is very, very different. Different corporate cultures, different times and the knowledge that the future for both partners is here right now and not just speculative dream, as was the case in 2000 or so. With only one position set to expire this week, 4 ex-dividend positions and some cash from the expiration of short puts, I don’t know how eager I’ll be this week to part with some cash. By the same token, AT&T, despite spending $85.4, may be appealing if it declines just a little more in price and Marathon Oil, ahead of next week’s earnings always seems appealing. It should be a busy week on the news front and for my part, i wouldn’t mind some more opportunity to sell some calls on uncovered positions, even if I end up not adding any new positions to the mix. This week, that’s really my preference, especially after having seen a number of positions expire with the October 2016 contracts coming to their end. Throw a few Federal reserve people into the mix this week and it may be an interesting one that I think t.hakes the market higher . |
