Equities start the day higher as the first day of school descends upon my town. When I left my imitation palatial estate this morning I could’ve sworn I heard hallelujah chorus being played but it might’ve just been my imagination. Hmmm. Not the first day of school where you live? It will be soon, and the tears of joy will flow like a tap at Mardi Gras. Futures were up 8 points when I sat down primarily due to a big rally in Europe. Why the juice? I’m guessing they are reacting to dovish comments from Draghi last week plus a little catch up with our markets here. Tellin Yellen gave us more of the same last Friday (slack in labor markets, no inflation, blah blah) so the next leg higher probably won’t be related to Jackson Hole. Stocks are rallying for all the same reasons they have been in the past: a decent economy, low rates, a dovish Fed, lack of other places to put money, people missing dips, strong M&A (Roche for ITMN this morning), and just a flat out uptrend that you do not want to be fighting. First day of school you say? Cue Johnny Mathis.
After the open we touched S&P 2000 in the first 30 minutes! So my prediction that we would see 2,000 by July 18 was only slightly off! #winning! What drove us to that arbitrary number that I am using to fill space on a dead day? Nothing in particular, just more of the same secret sauce we’ve been dabbling in all year. Biggest winner today? BKW, up whopping 19% (yea I went there). Why was the king of Burgers up so much? Because they are thinking about joining forces with Tim Hortons and making burgers out of Canadian Donuts. Can you imagine? I’d buy 2 a day minimum. Actually they are thinking about thumbing their nose at the American tax system and merging for one of those inversion things that seems to be popular these days. What were their effective tax rates in 2013? Burger king was 27% and Tim Hortons was 25%. So yea…I must’ve slept thru that corporate finance class because wow. Hey, junior banker, do me up one of those fancy DCF things and let me know what I’m missing. Oh and put down that red bull and have a glass of water, you’ll die otherwise. Are these inversion things going to be all the rage now or what? Is someone going to look at Blackberry and be like “yea, we could move our HQ to Waterloo.” Wait…wait. Hold on, I’ll be right back. Ok I’m back, what else? Lordes won “Best Rock VMA” last night on MTV. Apparently Lordes qualifies as rock now. Honestly I’m speechless over that. Aerosmith, Guns N Roses, Nirvana, Lordes. Yep, birds of a feather. Did I mention S&P 2000 yet? Hey guess what, if you bought S&P 1000 it only took 16 years to double your money. How do you feel about that? Bad? You should. By lunch nothing was happening on the slowest day of the year and the market sat on 1,997 threatening to make everyone who bought 2,000 feel bad.
The final hour brought nothing new. In fact with 11 minutes to go we hit the same volume traded as July 3rd…a half day. That right there tells you all you need to know about Monday August 25, 2014. Oh and my rambling 2nd paragraph because there wasn’t much else for me to write about. One late bit of news was AMZN acquiring Twitch for $970mm and maybe I’ll use my next recap to tell you why that deal is insanely good. Jeez, AMZN is going to crush it with that service. Anyway we closed at 1,997, up 50bps, but the headlines in tomorrow’s WSJ will read “S&P 2000” so be ready for calls from your uncle about what stocks to buy and whether he has “missed it” yet. You know they’re coming.
Final Score: Dow +46bps, S&P500 +50bps, Nasdaq +36bps, Rus2k +41bps.
Absolutely nothing going on link-wise today so we’ll move to the big finish.
Tonight I have two end links for you.
The first is a wingsuit video where the guy flies thru trees. I’m serious, thru them.
The second is a bit more quirky. You ever see a carrot ruin a party? No? Well now you have.
Have a good night.