Possbile Merger Name: Direct A TV & T

Welcome to May! The year is one-third over, and the S&P 500 is up 2.56% for the year (including dividends).

There’s an old Wall Street saying, “Sell in May and go away.” Well, there’s some truth to that in a large historical sense, but there’s no value in literally following that advice. Historically, the Dow has hit a near-term peak on May 6, then rallied during the summer before a fall sell-off. From May 6 to October 29, the Dow has historically gained just 0.35%, meaning it’s been about flat for half the year. Nearly the entire yearly capital gain comes from October 29 to May 6.

In economic news, jobless claims unexpectedly rose last week. The number climbed to 344,000 for the week ending April 28. That’s a bit of surprise since the recent numbers have been so strong. We’ll learn a lot more about the jobs market tomorrow when the government releases the April jobs report. Yesterday’s ADP report said that 220,000 private sector jobs were created last month, but the ADP isn’t a very reliable indicator. Also, the Commerce Department reported that consumer spending surged by 0.9% in March, that’s the biggest increase in five years.

Ford ($F) reported this morning that sales fell 0.7% in April which was below estimates. This is also a big day for Ford as the company has named COO Mark Fields to replace Alan Mulally as CEO. They’ve been making it clear that Fields is their choice for months. He’ll take over on July 1.

But the biggest news for our Buy List today is that the Wall Street Journal reported that AT&T spoke to DirecTV ($DTV) about a possible takeover. This would make sense as a response to the Comcast/Time Warner Cable deal. I don’t know how serious the companies are, but traders are taking the news seriously. The shares are currently up 5.7% this morning.

Posted by on May 1st, 2014 at 9:52 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.