Stocks are looking for direction amid a flurry of takeover headlines this morning. Asian stocks were higher overnight on the back of Wall Street's Friday gains, but European markets are mostly weaker.
Merger Monday
DaimlerChrysler has finally succeeded in unwinding most of its failed investment in Chrysler. The company announced today that it will sell a controlling stake in Chrysler to private equity firm Cerberus for $7.4 billion. Daimler will retain a stake in Chrysler, but it is immediately shedding Chrysler from its corporate name. It will now be known simply as Daimler AG.
A few other deals are making headlines. Mylan over the weekend said it was buying the generic unit of Germany's Merck for $6.7 billion, and this morning Cardinal Health said it would buy Viasys Healthcare for $1.5 billion.
The Financial Times reports a fissure in Dow Jones controlling Bancroft family, with some members interested in hearing more about News Corp. Chairman Rupert Murdoch's offer for the company and others opposed to the idea.
Another family fracture could be brewing in Detroit. Bloomberg today repeats a report that first surfaced last week. The Ford family, it says, are discussing the sale of part of their controlling stake in the company and are encouraging the retention of Perella Weinberg Partners on a share sale or some alternate strategy. The report says that Ford chairman Bill Ford briefed directors on the family's views before the annual shareholders meeting in Wilmington last week.
Rate-Cut Speculation
The dollar is weaker against the euro this morning as traders await tomorrow's retail inflation data. Investors are again speculating the Fed could cut interest rates due to a low-inflation scenario and weakening economy. Stocks rallied Friday after tame producer prices data showed inflation under control.
"Investors and traders demanding that the Fed ease if the economy should lose some of its steam is an almost wishful request," says our Rick Santelli. "This is not Greenspan. This is Bernanke. This is a Fed that is conservative. They realize global forces and how they affect their job is something they're not quite sure of ... with the U.K., Europe, Bank of Japan doing more tightening. That in a way is what the Fed wants to have happen. They're not going to make any sudden changes ... If it really deteriorates, they're going to be late easing. I guarantee that they want to be late. They don't want to be ahead of the curve on this one with globalization changing how you measure our economy against the global economy and inflation throughout the globe."
