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Two Ways To Play: Big Blue Acquisition


Strengthen your portfolio in good times and bad.


IBM Makes Lawsuit, Competition Go Away

The Wall Street Journal reports in an attempt to eliminate litigation and a potential competitor, International Business Machines (IBM) agreed to buy Platform Solutions Inc. IBM said Platform Solutions' revenues are too small to require review of the deal in either the U.S. or the European Union and didn't disclose what it would pay for the venture-capital backed 30 person firm. Platform is in the business of selling powerful computers that run the same software that runs on IBM's Z-system mainframe computer, which can cost upward of $1 mln. Both companies will also drop suits against each other regarding theft of trade secret and copyright violations. See Professor David Nelson's Technology Tune Up.

From the Bull Pen: Bulls looking for a tech play might see one in Yahoo (YHOO). Near-term sell-stops may be set near the $20 level.

From the Bear Cave: Using the "fat crayola" method, Bears see previous $120 support is now resistance for IBM. Buy-stops can be set above that level on downside tries.

China's Hot Money Solution?

Bloomberg reports Moody's economist Sherman Chan said China's latest approach to controlling capital inflows by scrutinizing export deals is a "band-aid approach." "By going down this path it gives the impression that it has exhausted all other options," Chan said. The only sure method would be to allow a faster yuan appreciation. China's foreign exchange reserves are the world's largest and surged 40% to $1.68 trillion in March from a year earlier. See Professor Cody Tafel's What Will Third Quarter Hold for Dollar, Oil and China?

From the Bull Pen: Bulls looking for a Chinese play might see one in Baidu (BIDU). Did the stock successfully test $300? Those bullish can set a tight sell-stop below that level.

From the Bear Cave: Bears are watching the China 25 ETF (FXI) and may press the downside should the stock break $120 support. If and when.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading was mixed with the Hang Seng -2.13%, Nikkei -0.16%, Sensex -4.18%, Taiwan +0.5%, and Shanghai +1.95%.

A look at Europe, we find the CAC -0.71%, DAX -0.71%, FTSE -0.32%

As of 8:30 AM EST, S&P futures are trading +7 points to 1270, and Nasdaq futures are up +3 points to 1828.

A Look At Commodities

In commodities, crude oil is up +1.54 to 145.11. Gold is unchanged at 946.50. Silver is up +0.033 to 18.370, and copper is lower -3.85 to 403.90.

The dollar index is up +0.041 to 72.071.

On the Radar

Unemployment rate: 5.5% vs. 5.4% cons.
Change in Mfg payrolls: -33 k vs. -30 k cons.
Avg. Hourly Earnings (m/m): 0.3 vs. 0.3% cons.
Avg. Hourly Earnings (y/y): 3.4% inline.
Avg. Weekly hours: 33.7 inline.
Initial Jobless Claims: 404 k vs. 385 k cons.

10:00 ISM Non-mfg composite: 51.0 cons.

Have a safe and happy 4th of July!

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No positions in stocks mentioned.

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