Diamonds and Dogs

10/24/16

Merger Monday. Three big mergers this morning have the averages trading higher. AT&T (T) wants to buy TimeWarner (TWX) for $85 billion. Both stocks are lower. TD Ameritrade (AMTD) wants to buy privately held, Scottrade for $4 Billion. Ameritrade is up a percent. But the diamond of the day is BE Aerospace (BEAV) being acquired by Rockwell Collins (COL) for $8.3 Billion. BE Aerospace is up 15% to a 52 week high, but not an all-time high while Rockwell is down 5%. Boeing (BA) is jumping 2% to new recent highs on the news.

Boring isn't beautiful. Paper product maker and consumer staple, Kimberly Clark (KMB) is down 3% to a 52 week low after disappointing earnings on a sales miss. The company also narrowed 2016 earnings guidance and lowered full year organic sales. Low interest rates have been propping up blue chip income stocks like Kimberly-Clark and P&G, Telecom stocks and the Utilities. These three sectors outperformed the first half of the year, but have come under pressure since July 1^st.