Sunday, June 3, 2007

Monday Morning Curtain Raiser And The Week Ahead

A small scale merger Monday is already in the making and as usual it features companies that were not part of the Friday rumor mill:

Netherlands' Qiagen buying Digene for $1.6 billion. Digene (DIGE) closed Friday at $44.77 with just a smattering of options trading. The takeover price is $61.25. Hot diggity!

Blackstone, purported in the rumor mill to be after Micron (MU) is making a buy. But it's purchasing an insurance brokerage company: Blackstone to acquire Alliant Insurance Services.

There's a $5 bln offer already on the table for Dow Jones (DJ) from Newscorp (NWS) and Rupert Murdoch. The much ballyhooed meeting between 'Roop' and the controlling Bancroft family is scheduled to happen tomorrow in New York. It's tempting to think that something above $5 bln might be enough to sway the family, but editorial independence of the Journal remains a huge issue. An article on the WSJ.COM web site tonight that Murdoch will not accede to a demand that Bancrofts be allowed to control an editorial oversight board indicate the two sides are far apart and that money may not bring them together.

10 year treasury yield at 4.956 Friday is the number to watch in the coming week. A further backup in yields (a move toward 5%) could trigger angst on Wall Street. But how much angst could anyone feel for very long on the street with so much money being juiced into the system. does a nifty job tracking security repurchase agreement (REPO) activity at the NY Fed and money has been flying out of the discount window at full throttle.

That chart above gives insight into why the world of the high flying stock market is bumping up against rising bond yields where the whiff of inflation continues to get stronger but still suppressed by the official figures which continue to keep monthly core numbers at around .2%.

The economic calendar is quiet this week. We get factory orders on Monday, ISM services on Tuesday, productivity on Wednesday, jobless claims on Thursday and trade deficit figures on Friday.

After a dismal April, due to an early Easter, retailers are expected to show a rebound in May sales. The numbers will be released Thursday morning.

Fed chairman Ben Bernanke is a travelin' man this week. He will be attending a monetary conference in South Africa (lovely this time of year) and will make a joint appearance with his counterparts from the Bank of Japan and the European Central Bank.

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