Today I am initiating a new weekly feature to thebuttonwoodproject investment blog: “Week in Review”. As per “About This Blog”, you know I am not inclined to predict the stock market as CNBC does “so accurately” every few minutes throughout the day, but taking a look at events of the past week – that can have an effect on the future – may be of interest to my readers. So here we go:
The biggest headline of the week was Thursday’s loss of trading on the NASDAQ. Although I agree that the integrity of trading platforms need to be sound and dependable, what was all the noise about for a three hour loss in trading on one exchange? I remember the days when I had to run down to my broker’s Quotron machine to get the last price traded for a stock (forget about the “bid” and “ask”) and I survived. Is it a case where the business press has so little to talk about that it took this to the “Breaking News” aspect of journalism? The SEC took notice, okay I understand that. But the Secretary of the Treasury and the President were kept apprised of developments throughout the event.The inter-connectivity of trading platforms is becoming so complex that most professionals don’t fully understand it themselves. Except for the day traders, this incident would have gone mostly unnoticed and a footnote in the news. Now there will be a Federal inquiry that will take month$ to complete, not to mention trial lawyers wringing their hands for some lucrative lawsuits. Come on already!
In more important news, Microsoft CEO Steven Ballmer announced his impending departure (asked to leave?) from the firm making way for some sorely needed new blood to revive the underperforming firm. In the 13 years under Ballmer, the stock price has gone nowhere (see chart). He will stick around until the board (i.e. Bill Gates & Co.) chooses a successor. They should look outside the company for a replacement, in my opinion. But we’ll see.
Closer to thebuttonwoodproject home, Google sent some shockwaves this week by making a bid to infringe on DIRECTV’s (NASDAQ: DTV – $57.88) NFL Sunday Ticket package. While this may be a long and hard row to hoe for Google, it does indicate a degree of a threat by high-speed Internet TV streaming vs. traditional cable and satellite broadcast. Not sure if it will be in the NFL’s best interest to experiment with such a lucrative $1 billion DTV contract, and if so, it will take awhile for Google to make significant inroads; and it won’t be “free”, either. Furthermore, the NFL has to consider its $43 billion in deals with the likes of CBS, ESPN, Fox, etc. before it considers such a drastic move. Qualcomm (NASDAQ: QCOM – $67.15) decided to sell its Omnitracs business that tracks trucks and provides other logistic services for fleet owners and one of QCOM’s first products rolled out in 1988. No longer a part of the company’s main focus, a good move for a cash price tag of $800 million. In economic news, new housing starts were disappointing but existing home sales rose to a four-year high. What is the Fed to do?
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