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If It's Macro, We Don't Care

07-12-2018

The market was about 0.75% higher through midday, once again for no particular reason that I could detect. In an interesting development, however, Broadcom saw its stock price decline 15% on the latest acquisition proposed by the company's CEO.

The reason I bring that up is because in the past, as Mr. Tan has done his serial rollups, he has been applauded. Granted, the proposed acquisition is in software, not chips, but the mood of the market has been such that I would expect it to forgive most things. So the fact that this idea was received so poorly might be a sign of a willingness to be skeptical, although I think the bigger lesson is that AVGO gapped lower on what has been voted on as not being good news. That could be a roadmap for how other stocks with problems are treated as we make our way through earnings season. (Meaning that company-specific issues might finally matter, unlike all macro ones, which have been ignored.)

Sometimes the Dollars Make Sense I believe that would be an "intellectually suitable" outcome to penalize those who have been rewarded for ignoring any and all negative developments. In the past that has been how things tended to even out, so we will see if that "reciprocity" plays out prospectively.

Turning back to the action, in the afternoon the market climbed more, led by the Nasdaq, which gained over 1.25%. Away from stocks, green paper was mixed, weaker against many currencies but stronger against the slowly vaporizing yen. Oil was flat, fixed income was a little lower, and the metals bounced after yesterday's puking.

Positions in stocks mentioned: none.