These blog posts originally appeared on RealMoney Silver on Oct. 2.M&A Environment Still a Bit Polluted -- 7:56 a.m. EDT Yesterday, I underscored the reality of the First Data loan sale by Credit Suisse ( CS - Get Report) and Citigroup ( C - Get Report). Yesterday, Nokia ( NOK - Get Report) agreed to acquire Navteq ( NVT - Get Report). Today, Toronto-Dominion ( TD - Get Report) has agreed to acquire Commerce Bank ( CBH - Get Report). Importantly, the Navteq acquisition was actually a takeunder (a takeover where the target is offered a price less than its current share price), and the Commerce acquisition was agreed to at only a modest premium. Meanwhile, both the Harman ( HAR) and Acxiom ( ACXM) deals have been called off. Nevertheless, the media is waxing enthusiastically that the deal game is back. By contrast, it seems to me that these data points indicate a market that is being priced for perfection and a leveraged loan market that is still problematic. But that's me.
Citigroup Sees Weakness in PC Space -- 10:27 a.m. EDT Citigroup ( C - Get Report) has an interesting comment this morning on personal computer components. The brokerage sees some potentially weak data for the fourth quarter with Hewlett-Packard ( HPQ - Get Report), Dell ( DELL) and Acer canceling some orders. As well, Taiwan notebook shipment forecasts are below normal seasonality, with order books looking soft for the holiday selling season. I had previously mentioned that August semiconductor equipment orders were weak in Japan.
Is Relative Value at Home or Abroad? -- 9:23 a.m. EDT Here is an interesting table, courtesy of John Mauldin, underscoring the lagging performance of the non-export, domestic, housing-centric sectors vis-à-vis the weak-dollar, export beneficiaries.
|Source: John Mauldin's "Outside the Box"|
According to the savvy Mauldin, the export beneficiaries are roughly 60% weighted in the S&P 500. One has to wonder where the relative value lies today given the almost universal view that large-cap, weak-dollar plays have so conspicuously outperformed.