Monday afternoon markets mildly up, with telecom stocks strong for now, Dow Industrials mixed, and markets still overbought.
WASHINGTON, March 21, 2016 – As we write this, a moderately surprising early spring Apple Event is unfolding out in America’s Left Bank. Apple (symbol: AAPL) CEO Tim Cook, et. al. have just opened the meeting by virtue-signaling their support for all things environmental, social and liberal while staunchly defending the right of Apple device owners to shield personal information from the FBI and the NSA even if they’re card-carrying members of ISIS.
But, political preening aside, the real reason for today’s event is the ostensible announcement of a new, cheaper iPhone, allegedly something of a retread of the iPhone 5s model, but with a much faster chip and more advanced capabilities equal to the 6 models in many respects. The idea is to appeal to more casual smartphone users who actually use the thing for phone calls, occasional texts or IMs and occasionally engage Siri to take them where they want to go while engaging in occasional snappy repartee.
We’ll issue an update on the details later Monday afternoon. But let’s get back to other news that’s coloring today’s markets mildly green in modest trading.
“Apple unveiled a new 4-inch iPhone, and a smaller iPad Pro during a Monday event.
“The company said its new phone — called the iPhone SE — will begin at $399 for the 16GB model. The new iPad Pro model, which features a 9.7-inch display, will start at $599 for the 32GB version.”
There’s little news on the economy this morning. However, there are plenty of business stories crossing the tape. Aside from Apple’s new-old smartphone, we find two of these news items rather compelling for stock traders.
The first involves filmmaker Lions Gate Entertainment Corp. (LGF—also known as “Lionsgate”), whose third “Divergent” installment, “Allegiant,” is tanking badly at the box office, just like its predecessors. According to Deadline,
“Wall Street is roaring back at Lionsgate this morning for the disappointing box office performance this weekend of The Divergent Series: Allegiant. Shares are down about 3% in early trading today — bringing the six-month drop to more than 45% — after the film generated $29 million domestically.
“Analysts expected better. On Friday, Wells Fargo Securities’ Marci Ryvicker forecast a $35 million weekend while MKM Partners’ Eric Handler looked for $34 million.
“They don’t believe the film will have a chance to catch up. Next week it will compete with Batman Vs. Superman, which will take over Imax screens.”
Lions Gate seems to be behind the curve on this one, having lost the box office battle badly to the Disney animated feature, “Zootopia,” says USA Today:
“In light of “Allegiant’s” second-place finish, “Zootopia” ruled the jungle with No. 1 and $38 million, bringing its North American tally to $201.8 million in just 17 days. Disney’s animated animal comedy has ruled the box office for three weeks straight, netting a combined international haul of $591.7 million.”
Maybe that long-fabled younger male filmgoing demographic is tiring at last of dystopic adolescent action film series like “Hunger Games,” whose finale also didn’t do as well as expected. Perhaps having already tuned out all the unrealistically beautiful and super-powered female police chiefs and CEOs who’ve taken over from the guys on network TV, young millennial dudes are getting tired of Hollywood movie scenarios where most of the young guys are wimpy or brain-damaged losers who need a strong chick to survive.
In any event, maybe these “privileged” young guys will find cinematic salvation soon as SuperDude and Batman battle it out on the silver screen and at the box-office this coming weekend. Then again, Wonder Woman is supposed to show up in this film, too. Maybe she’ll beat the crap out of both of them. In today’s Hollywood, which would seriously mess with this theory.
But back to the world of stocks, we also have big-time merger news today with the announcement that the giant Cleveland-based paint and pigment maker Sherwin-Williams (SHW) plans to acquire smaller Minnesota-based paint maker Valspar (VAL) for megabucks, God and the trustbusters of Obamanation willing.
For its great size, SHW sells a lot more paint to contractors these days than to Harry Homeowner. VAL, on the other hand, has a monster presence on the shelves of Home Depot’s (HD) DIY rival Lowes (LOW), potentially giving SHW significant access to the home improvement market. VAL also generates considerable foreign sales, a market SHW has barely penetrated despite its dominance in the U.S.
We’re going to sit tight today and see if this market is ready to relieve its once-again overbought condition before we commit any more funds. By some luck and, we’d like to think, a bit of skill, we’ve gotten back over half the money we lost from December through February in the past 3 weeks, and we’re not willing to go all-in right now with the market so far ahead of itself in so short a time.
The Maven needs to make that other 50 percent back before he’ll once again start feeling like the genius he is—while avoiding a fatal case of hubris en route.Click here for reuse options!
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