The market is performing nicely so far this morning as stocks, particularly the financials are up 3-5%. So real quickly, why? Well all you really need to do is take a look back at the things I mentioned yesterday as to what short term things I was watching in order to try to better judge the markets overall direction.
- Gold is down by appromixately $50/ounce (which means there is a flight out of safe haven assets into stocks)
- The European markets performed well overnight, as both Greece and Italy began working on ways to significantly decrease their levels of debt and therefore avoid default (bankruptcy) - remember as of now, we are held at the beholden of Europe and the fiscal/financial crisis that is taking place
- Economic reports out of Germany showed a 4% gain in growth, which is the biggest number seen since the summer of 2010
In other important news, Yahoo (board of directors) fired their CEO last night Carol Bartz, which is seen as a good management move considering she'd done little in her 3 year tenure there to enhance shareholder value. In talking with several hedge fund managers, they agree that experience tends to show that sudden moves like the one was done last night at Yahoo! often precede a corporate transaction (e.g., a possible breakup/sale of Yahoo! Ali Baba, Ali Pay, Yahoo! Japan and search - all of which are part of the company "Yahoo"). I'll be watching this situation extremely closely as I am of the belief that there will be some sort of transaction/breakup/sale sometime soon...
I also still haven't bought any stock in 99Cents Stores despite the fact the stock is trading below the buyout offer on the table...it's currently at $18.67, and from $19.09, that represents a pretty much guaranteed return of 2.2%. Nothing to write home about but if the stock sells off a bit, it would definately become more attractive (not to mention that some other money managers I talk to believe the buyout offer will ultimately be raised to $21-22/share, and that of course would put you up around a 15-20% return!).
