Corporate mergers and divestments are a fairly common activity. But it's rare to see a company spin off a division and then seek to get back together again like a pair of high school students in love.
 | |  Good morning. Corporate mergers and divestments are a fairly common activity. But it's rare to see a company spin off a division and then seek to get back together again like a pair of high school students in love.
Yet we may see just that, on news that Altria and Philip Morris are in early discussions to merge companies. Long-lived investors may remember when Altria announced its plan to spin off Philip Morris back in 2007, which finally happened in 2008. In a corporate lifetime, 11 years apart isn't too bad, but we'll also have to wait and see what shareholders and regulators think about creating a mega-tobacco deal.
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| | |  | DOW 25,804.663 | -0.36% | | | | S&P 2,871.07 | -0.25% | | | | NASDAQ 7,830.63. | -0.29% | | | | | *As of market close | | | • | Stocks started with a rally on Tuesday, before swinging to a modest loss. | | | • | Oil moved higher 2.5 percent, to $54.99 per barrel. | | | • | Gold moved higher 0.7 percent, to $1,548 per ounce. | | | • | Cryptocurrencies moved down, on average. | | | |
| | | U.S. Consumer Confidence Dips in August | | | | The Conference Board index on consumer confidence reported a slight dip in August, from 135.8 in July to 135.1. This was still higher than analyst expectations of a drop to 129.5.
Consumer confidence is an index with a value of 100 as neutral. Numbers over 100 show strength, and numbers under 100 show a decline. The data still shows that consumers remain confident, even as other economic indicators hint at a slowdown.
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| | Wells Fargo Resumes Comcast (CMCSA) Shares as Outperform | | | | On Tuesday, Wells Fargo announced a resumption on its coverage of Comcast (CMCSA). The bank rated the company as Outperform, with a price target of $50 per share. At current prices, that's a 15 percent move higher in Comcast shares.
Currently, 23 investment firms following the company have the firm listed as a Buy, three list as an Overweight, and six list as a Hold. None of the analysts following the company have it listed as an Underweight or Sell.
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| | Insider Activity: Johnson Controls International (JCI) | | | | On Monday, August 26th, director Gretchen Haggerty bought 6,220 shares of Johnson Controls International (JCI). The cost came in just over $257,000, and represents a 93 percent increase in shares.
This is the first insider buy at the company since late 2017. Insiders have largely been sellers of shares at JCI year-to-date, at prices ranging from the current price to 8 percent higher, a typical pattern for a large, international company.
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| | | | Unusual Options Activity: Melco Resorts & Entertainment Limited (MLCO) | | | On Tuesday, over 3,050 contracts traded on the January 2020 $19 put options on Melco Resorts & Entertainment (MLCO). With a prior open interest of 163, this is a 19-fold surge in volume for the option contract.
With shares of the company currently trading just over $20, it's a bet on a 5 percent decline in shares in the next 142 days before the option expires.
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| | | | TOP | | | COST | 4.999% | | | | ATVI | 4.929% | | | | NEM | 3.295% | | | | IDXX | 2.757% | | | | MKTX | 2.675% | | | BOTTOM | | | SJM | 8.182% | | | | PM | 7.758% | | | | HUM | 5.793% | | | | MCK | 5.664% | | | | ABC | 5.378% | | | | |
| | |  | It is likely that 2018/2019 will be the potential peak of corporate share buybacks, thereby reducing the demand for equities in the market. This 'artificial buyer' explains the high degree of complacency in the markets despite recent volatility. It also suggests that the 'bullish outlook' from a majority of mainstream analysts could also be a mistake.
If the economy is weakening, as it appears to be, it won't be long until corporations redirect the cash from 'share repurchases' to shoring up operations and protecting cash flows." | | - Analyst Lance Armstrong on the strong support that share buyback programs have added to the market.  | |
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