Orlando, Brexit roil markets. Plus: Microsoft buys LinkedIn
WASHINGTON, June 13, 2016 –Stocks opened moderately down Monday with plenty of serious and still-breaking, market-moving news to absorb. As of 10:30 a.m. EDT, the Dow and S&P 500 were off a fraction, while the tech-heavy NASDAQ was off more sharply, down nearly 0.25 percent.
The market was already rocked by Friday’s lousy close on fairly heavy volume, caused to some extent by a sudden “unexpected” drop in the price of crude oil (which continues this morning). Uncertainty also hung over the market courtesy of America’s latest jihadi mass murder action, this one at Pulse, a popular and trendy gay night club in Orlando, Florida, where 49 “Latin Night” partiers were slaughtered and some 53 others injured, some seriously.
All manner of politicians weighed to deplore the incident, although President Obama and other Democrats debased themselves and their party yet again by calling for more “gun control.” As if that would have stopped this latest mass-murderer, perpetuated by a radicalized, American-born U.S. citizen of Afghani origin whose Taliban-supporting father later explained away his son’s horrific action as having nothing to do with Islam. As if.
The whole incident calls attention once again to America’s current, suicidal immigration and legal policies that let in—illegally or not—all manner of immigrants who refuse to assimilate into American society, while failing to follow up adequately when background checks raise yellow flags.
Mateen had been interviewed by the FBI no fewer than three times, as it turns out, although he was not ultimately detained. Yet at the same time, he had worked as an armed guard for a contractor that frequently oversaw security at U.S. government facilities. No yellow flags? It’s more than a bit disconcerting.
While such incidents can have momentary effects on the stock market, as Orlando is proving today, they also undermine confidence in the U.S. government’s ability to do anything right, as in “manage the economy.”
The Fed will release yet another missive Wednesday afternoon, and, although most analysts now view an interest rate increase as unlikely, some firmer statement of principle by the Fed might be helpful at this point, as markets look as if they’d very much like to take the summer off in a waterfall of red ink.
And speaking of money, interest rates and statements, how about those latest polls from the UK, indicating a strong shift in favor of voters desiring to leave the eurozone already, an action popularly called the “Brexit” (Great Britain exit from the eurozone), similar to the threatened “Grexit” (Greek exit) that hogged the headlines a year ago but never happened.
We won’t bother getting into the economic earthquakes that might occur should UK voters actually give the Brexit a thumbs-up. But suffice it to say that a pro-Brexit vote will have traders world-wide stampeding for the exits, at least in the short term. This fear is likely another reason why we’re experiencing the current slow but relentless selloff in stocks.
Given this current mess, it’s a good time for all of us who still have stocks in our portfolios to make a few defensive maneuvers. We’ll take a look today at one easy, no-brainer defense in a companion Market Maven article.
In more positive news, Microsoft (symbol: MSFT) has announced a friendly takeover bid for professional social networking company LinkedIn (LNKD). As is typical in such actions, the company doing the takeover, Microsoft, is down sharply in Monday trading as it will have to do the spending.
Meanwhile, lucky LNKD shareholders found their shares soaring into the stratosphere, up some 47 percent ($61+ per share) with shares currently changing hands at a lofty $192.74 per share. We’re sorry we missed this one, but if you weren’t already in LNKD, it’s best not to chase the stock at least for now.
BTW, for all the bad-mouthing Apple (AAPL) has been getting from smug, smart-assed analysts lately, why has that company been raising massive amounts of money by selling even more bonds, including tranches denominated in East-Asian area currencies? Attention is being focused on Apple’s World Wide Developers Conference being held in America’s premier sanctuary city today. But a bigger, bolder takeover offer might be on the horizon, one that might exceed today’s MSFT/LNKD marriage by an order of magnitude. You heard it here first.
The Lord giveth and the Lord taketh away. That’s clearly the moral of today’s trading action.
*Cartoon by Branco. Reprinted with permission and by arrangement via LegalInsurrection.