The stock market rally, rising Treasury yields, a rebounding dollar, strength in machinery stocks like
and an uptick in so-called C&I loans all point to an economic rebound in the second half of 2007, Aaron Task says on Monday's
"The Real Story" podcast. "That has profound investing implications."
failure to establish a new closing high Monday in no way changes the bullish trend, Task says, adding that speculation that a "top" was made today is another sign of skepticism which is bullish from a contrarian standpoint.
editor-at-large remains bullish is the ample liquidity which is fueling M&A and private equity activity worldwide. Such trends were a highlight again Monday, most notably:
- A roughly $25 billion private equity deal for Alltel (AT) - Get Report, which gave a boost to other rural wireless players, including Dobson (DCEL) and Rural Cellular (RCCC) .
- Hologic (HOLX) - Get Report acquiring Cytyc (CYTC) in a $6.2 billion combination.
- Williams Cos. (WMG) - Get Report selling its power generation business to Bear Stearns (BSC) for $512 million.
- Olin (OLN) - Get Report acquiring fellow chlorine and caustic soda maker Pioneer (PONR) for $413 million.
- Video-game publisher Electronic Arts (ERTS) announcing plans to acquire a roughly 15% stake in The9 (NCTY) - Get Report, a Chinese online-gaming operator.
Speaking of China, Jianyin Investment Co., an investment fund operated by the Chinese government, said Sunday that it will buy a $3 billion stake in the private equity firm Blackstone Group LP. The news comes just days ahead of a meeting between U.S. and Chinese officials, including Treasury Secretary Paulson and Chinese Vice Premier Wu Y, Task notes.
Outside of M&A, the big news today was the renewed strength in crude and related stocks, as well as the pharmaceutical/biotech industry. Task's guest,
biotech columnist Adam Feuerstein, was on to discuss the latter, including
advancing their Alzheimer's drug Bapineuzimab into a phase III trial.
Feuerstein also discussed recent weakness in
ahead of the big ASCO cancer drug confab next week.
Other drug stocks in the news Monday included
, which tumbled on news that the FDA has raised safety concerns about its diabetes drug Avandia;
, which soared after the FDA approved its Edac Quantifier device; and
, which issued a positive late-phase study of its Oncophage kidney cancer vaccine.
In the remainder of the podcast, Task discussed other corporate news, including weakness in retailers
, which fell into "the Geoff Tate Zone," as well as
, which just fell hard.
here to listen to the entire podcast.