One Corporate Event that Creates Buying Opportunities Time and Again

There’s an old market adage to buy when there’s “blood in the streets.” But there are plenty of ways to draw blood. In today’s litigious society, one such way is with a big lawsuit. From hot cups of coffee to weed killer that may be cancerous, it’s no surprise that America still leads the world in producing lawyers who need something to do—which usually means finding someone with deep pockets to sue. While many cases have their merits, a favorable jury will often hand out pretty sizeable sums—and that kind of news can set back the shares of a company’s price. The ...
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United Technologies, Raytheon Propose Merger

Proposed merger would create second-largest defense contracting company. United Technologies (UTX) made a proposal to purchase competitor Raytheon (RTN) in an all-stock deal on Monday. The merger, if approved, would create the second-largest company in the defense space after Boeing (BA). The combined entity would create a company making everything from parts to F35 fighter jet engines to Patriot missile systems. With some proposed spinoffs to make the merger work, the value would still put the new company at over $100 billion in valuation. The deal must still face regulatory scrutiny. With fewer, and larger businesses, there is less competition, even for the ...
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U.S. and Mexico Reach Border Agreement and Avert Tariffs

Both countries agree to work together on curbing migration, sending stocks up on Monday. Mexico and the United states have agreed to stem the tide of migration through Mexico and into the United States. The news came late Friday after 10 hours of meetings, and the news gave markets another bounce on Monday. The State Department released a declaration stating that it would work with Mexican authorities to expand a program returning asylum seekers while claims are adjudicated. Mexico also agreed to take steps to increase enforcement and “irregular migration” throughout the country, including the deployment of 6,000 members of the Mexican National ...
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Insider Activity: MGM Resorts International (MGM)

Hedge fund titan makes huge bet on the casino operator. One director just made a $75 million bet on the future of gambling. On June 7, director Keith Meister bought 2.8 million shares of MGM Resorts International (MGM). Meister, an activist hedge fund manager at Corvex Management, already owns over 18 million shares. The casino company saw shares rise last week along with the overall market, but around $27 per share, shares are still below their 52-week high of $32. Casino stocks are somewhat cyclical, tending to expand with the economy. They tend to contract during recessions, although there are always a core number ...
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Unusual Options Activity: Advanced Micro Devices (AMD)

Trader bets on 50 percent decline in shares over the next year. At least one trader is betting on a massive decline in Advanced Micro Devices (AMD) between now and June 2020. On Monday, over 7,000 contracts traded on a June 2020 $15 put option for AMD. With a prior open interest of 466, this represents a fifteen-fold surge in volume. Shares currently trade around $34, implying a downside of over 50 percent for these put options to move in-the-money in the next 375 days.   Advanced Micro Devices is a quintessential Silicon Valley company. Operating in computing and graphics processes, its chips and ...
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Unusual Options Activity: Altice USA (ATUS)

Cable and internet provider shares see a surge in call option buying. At least one trader is betting on a big rally in Altice USA (ATUS) between now and September. On Friday, over 2,500 contracts traded on a September $26 call option for the company. With a prior open interest of 120, this represents a massive surge in volume. Shares currently trade around $24.50, implying at least $1.50 in upside over the summer. Based out of Long Island, Altice operates broadband and video communication services in the United States under the brands Cablevision and Cequel. It has approximately 4.9 million subscribers. The company ...
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Gold Prices Surge to Multi-Month Highs

After lagging year to date, the metal surges higher as Fed actions indicate weak economy. Thanks to a combination of economic and trade uncertainty, potential weakness in the U.S. dollar, a dovish Fed, and moderate inflation, gold prices have been heading higher in recent weeks. Gold prices closed last week over $1,340 per ounce, managing to hold their gains during a strong week of stock market performance. With rising expectations for the Fed to now cut interest rates later in the year, gold prices may rally further on perceived economic weakness. Gold prices peaked in 2011 over $1,900 per ounce on fears of potential ...
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Jobs Numbers Come in Weaker than Expected

75,000 jobs created in May lags expectations, but unemployment is still unchanged at 3.6 percent. Despite stronger jobs numbers from private data sources, the Bureau of Labor Statistics released jobs numbers on Friday. With an increase of 75,000 non-farm payrolls, the unemployment rate remains 3.6 percent. Traders had been betting on a larger number, but now an unusual situation exists in the job market. If the numbers are too good, the likelihood of an interest rate cut later in the year drops. While any one monthly report is just a data point, the trend of the past few months shows a slowdown in ...
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