Today, I start by offering my condolences. It’s tax day, never a pleasant time of the year.
Yesterday, I noted that the recent rally lacked enthusiasm. Low volume and small daily gains were the hallmarks. Did all that change yesterday after Intel (Nasdaq:
Maybe. Volume posted its best totals since February. And the S&P 500 made its biggest gain since March 5.
But more importantly, we’re seeing money come out of money-market funds. iMoneyNet reports that
Clearly, there’s still a lot of cash sitting on the sidelines. Some would say that this money belongs to individual investors who don’t want to be burned by another market crash. And cynics would say that the recent rally has been engineered to attract this money back into the stock market.
Unfortunately, the individual investor has a tendency to get bullish right at the top of a rally.
Now, just because anecdotal evidence suggests that the retail investor may be getting bullish is not a definitive sign that the stock market has peaked. Still, if the advance for prices continues like yesterday, we should be on our guard.
Analysts are saying this gives
Of course, that defeats the purpose. We want our currency to be the weakest in the world.
I’ve been following the General Growth Properties (NYSE:
If you’ve been following my narrative, you know that the #2 shopping mall owner in the
Part of this plan required
Pretty savvy move to turn the heat up on Simon. And investors have been waiting to see what Simon’s next move would be. The hope was that Simon would panic and make a much sweeter offer for General Growth.
Not so fast. Simon has some tricks up its sleeve.
Yesterday, Simon offered to match the capital injection offered by the hedge funds, except Simon won’t ask for warrants. That makes Simon’s offer more attractive and more likely to be accepted by the bankruptcy judge.
Neither of these players wants to be a
So this move by Simon is brilliant. For one, the company bought time for itself. And it may force the hands of any other
Now, the General Growth buyout saga has implications for other beaten down commercial real estate companies. Because these companies own valuable assets. It’s just that their cost structure is all out of whack due to the financial crisis. Rents are down, but commercial mortgage debt is not, nor can it be refinanced in the current environment.
That means the people with cash – hedge funds and sovereign wealth for instance – are in the cat-bird seat because they can pick up valuable assets on the cheap. Daily Profit readers shouldn’t miss the fact that the former CEO of Maguire Properties (NYSE:MPG) has offered to take a few problem buildings off Maguire’s hands.
The increasing interest in the assets of commercial real estate companies has helped them rally recently. And that rally isn’t done. These stocks will continue higher until the buyouts actually start. And depending on buyout terms, they will likely continue to rally.
If you haven’t seen TradeMaster Jason Cimpl’s video report of commercial real estate stocks breaking out to higher prices, you can do so HERE .