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Afternoon Note

Markets On The Move

By Charles Payne, CEO & Principal Analyst
5/21/2018 1:45 PM
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The markets have reacted well to the lessening of trade war concerns between the U.S. and China.  Although details were vague, equities took the news and ran with it.  After four days of narrow, sluggish, low volume trading the market was ripe for a reason to rally.  After the initial euphoria, trading subsided but there is still a bid under the market. 

China was not the only news supporting the markets today.  Micron (MU) has given a lift to the semiconductor sector after it gave upbeat guidance ahead of its Analyst Day at 1 PM today.  MU raised its revenue and EPS guidance and commented that industry fundamentals remain strong.  Investors will be waiting to hear what else MU has to say at its Analyst Day. 

Mergers and Acquisitions

In merger and acquisition news this morning, MB Financial (MBFI) agreed to merge with Fifth Third Bancorp (FITB) in a deal valued at $4.7 billion.   Hotel operator LaSalle (LHO) confirmed it will be acquired by Blackstone (BX) for $3.7 billion in cash, rejecting a cash and stock deal from rival Pebblebrook Hotel.  Another deal that caught investor attention was between General Electric (GE) and rail equipment and services company Wabtec (WAB).  GE and WAB will merge GE Transportation in a deal where GE will receive $2.9 billion in cash for a 50.1% ownership interest in the new company.

Today’s Action

All major equity indices are solidly in the green this afternoon.  Transportation stocks are leading the way so far today.  The truckers are out performing the rails as Old Dominion Freight (ODFL) attempts to break out to new highs.  ODFL has been in the rumor mill as of late. 

The Russell 2000 continues to add to its all-time high run.   Further buy signals come on closes above the following resistance areas:  Dow-25,086; S&P 500-2,739; Nasdaq-7,431. 

We are going to let things settle down and are not going to force the issue.

Charles, is pres Trump gonna lay dwn the orders to investigate FBI @3pm ET with dir WRAY? Wondering how the mrkt takes this, your thoughts?

J on 5/21/2018 2:12:13 PM

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