Todd Harrison: The Curious Timing of Rupert Murdoch
History doesn't always repeat, but it sometimes rhymes.
It's been an active 24 hours in financial circles, as these things go.
For starters, we're smack-dab in the middle of earnings, with JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Intel (NASDAQ:INTC), Johnson & Johnson (NYSE:JNJ), Yahoo (NASDAQ:YHOO), and Citigroup (NYSE:C) painting the tape in various iterations, albeit most reports coming in better than expected.
Federal Reserve Chairwoman Janet Yellen delivered her Congressional testimony yesterday, which of course we covered in real time. The soup-to-nuts highlights included a flexible data-dependent approach and her view that small-cap biotech and social media valuations were a bit high relative to historical means, reminiscent of Mr. Greenspan's "Irrational Exuberance" speech in 1996.
While traders and investors digest the tone and tenor of the speech, the chart below is worth a gander.
Finally, Rupert Murdoch stole the show this morning with news that Twenty-First Century Fox (NYSE:FOX) is looking to drop $80-some billion -- more than $85 per share -- to acquire Time Warner Inc (NYSE:TWX) after a friendly offer was rebuffed last month. It's a gutsy move for the octogenarian, but par for the course. He's made waves before, as demonstrated in the chart below, courtesy of Peter Atwater.
All in all, it's just another day for the world's wildest reality show. After five years of parabolic stock market frolic, our cognitive biases are conditioned to believe it will continue. The one-two punch of the above charts, however, suggests otherwise.
If history is a guide, the Goldman Sachs insider sales window should soon open.
Despite the back-and-forth of late, the S&P continues to meander in and around the S&P (INDEXSP:.INX) 1975 (bullish) price target fingered a few months ago.
GW Pharma (NASDAQ:GWPH) is a stock that I've been involved with at various times over the last year or so, although I'm not there now. It's the "purest" cannabis play out there, if for no other reason than it is covered by the analysts at Morgan Stanley (NYSE:MS) and Bank America (NYSE:BAC) (and, as we know, that's a prerequisite for institutional money).
- GW Pharma stock has gotten a lot of play lately, having been pushed on financial television by a well-known momentum player. It is now some $30 off recent highs and approaching a very important support at $80. If it holds, so be it; that is the bovine backstop. If it folds, however, a head & shoulder pattern "works" to $50. See both sides, and remember to practice discipline over conviction.
Janet Yellen will make $400,000 this year at the Federal Reserve. Something tells me she's gonna earn it.
- The NDX (INDEXNASDAQ:NDX) chart below provides a little perspective; it's been some run!
- One day we'll look back at this and it will all seem funny. Until then, may peace be with you.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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