This was anything but a slow weekend for the stock market...
CVS Is Ready to Swallow Aetna
CVS Health Corp. (CVS) said Sunday evening it will acquire Aetna (AET) for $69 billion. The company sees about $750 million in synergies, provided the deal passes regulators. It's expected to close in the second half of 2018.
"This combination brings together the expertise of two great companies to remake the consumer health care experience. With the analytics of Aetna and CVS Health's human touch, we will create a health care platform built around individuals," CVS president and CEO Larry Merlo said in a statement.
Bitcoin Is Still Going Haywire
Bitcoin is all over the map on Sunday following tumultuous trading earlier in the week. The cryptocurrency touched an all-time high of $11,736 on Sunday afternoon only to see a plunge to $10,936 by the evening.
The wild swings come on the heels of bearish comments by a key Chinese official.
Pan Gongsheng, head of the foreign currency watchdog the State Administration of Foreign Exchange, said in Beijing on the weekend that it would have been "scary" if China had not banned bitcoin trading and initial coin offerings (ICO) nearly three months ago.
"If things were still the way they were at the beginning of the year, over 80 percent of the world's bitcoin trading and ICO financing would take place in China - what would things look like today?," he said on Saturday, according to the South China Morning Post. "It's really quite scary."
Disney Renews Its Interest in Fox
It looks like Disney (DIS) CEO Bob Iger is still hunting for one more whale of a deal before he heads off into retirement.
The owner of ESPN and Disneyland has restarted discussions with 21st Centry Fox (FOXA) to buy up some of the media empire's assets, according to a new report Saturday from The Wall Street Journal. Talks are reportedly focused on the Twentieth Century Fox movie and TV studio businesses, overseas assets such as Fox's 39% interest in Sky PLC and several U.S. cable networks. Fox News and the Fox broadcast network aren't expected to be unloaded, according to WSJ.
Disney didn't return a request for comment. A spokesman for Fox declined to comment.
Ultimately, Disney's renewed interest in Fox shouldn't be a surprise. Well, that is if one attended this week's The Deal Economy conference and listened to TheStreet's founder Jim Cramer light up the mic with his Top 12 Takeover Targets for 2018.
Get Ready to Trade the Tax Plan
Under the Senate's tax plan that passed in the wee hours of Saturday, a new corporate tax rate of 20% would hit in 2019 (House bill has it in 2018). While the popular choice is to say Apple (AAPL) is an instant winner, there are other sectors to consider.
Banks are going to clean up, for several reasons. With Corporate America about to see a profit boost from lower taxes, a new wave of M&A activity will probably commence. Who makes gobs of money off of that other than golden parachute wearing CEOs? The investment banking teams over at Goldman Sachs (GS) , JPMorgan & Chase (JPM) , Morgan Stanley (MS) and Citigroup (C) . Further, with economic growth picking up amid the adrenaline shot of corporate tax reform, the Jerome Powell led Fed is likely to hike interest rates even faster. Higher interest rates = fatter net profit margins for banks.
Memo to Stock Market Bulls
Have you bought stocks over the last year in the hopes of a major U.S. tax overhaul boosting global growth? Then allow Goldman Sachs to happily ruin your investment thesis. "While the corporate tax changes are likely to result in a net tax reduction in corporate tax liabilities, the size of the tax cut actually looks fairly small," said Goldman Sachs economists in a new note Sunday evening. Goldman lifted its GDP growth estimates for 2018 and 2019 by a measly 0.3% each.
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