..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”.. — Bernard Baruch

1. Health-Insurance Sector in Consolidation Talks — merger talk in the health-insurance industry is heating up as firms grapple with the challenges and opportunities the federal healthcare overhaul has created. UnitedHealth (NYSE:UNH) has reportedly approached Aetna (NYSE:AET) about a takeover deal that would likely be valued at more than $40B, after Anthem (NYSE:ANTM) approached Cigna (NYSE:CI) with a $45B buyout offer that was rebuffed. Meanwhile, Aetna and others are considering buying Humana (NYSE:HUM), which is looking at strategic alternatives including a sale.
2. FDA Sets Date for Trans Fats Restrictions — beginning in 2018, companies will have to seek approval before they can put partially hydrogenated oils into foods, after the FDA said the ingredient should no longer be considered safe and laid out far-reaching restrictions. Possible companies effected by this decision are: Nestle (OTCPK:NSRGY), PepsiCo (NYSE:PEP), Tyson Foods (NYSE:TSN), Mondelez International (NASDAQ:MDLZ), Unilever (NYSE:UL), General Mills (NYSE:GIS), Kraft Foods (NASDAQ:KRFT), Kellogg (NYSE:K), Dean Foods (NYSE:DF), Campbell Soup (NYSE:CPB), Hormel (NYSE:HRL), Hershey (NYSE:HSY), Pilgrims Pride (NASDAQ:PPC).
3. EU Calls Emergency Summit on Greece — a meeting of eurozone finance ministers ended without a deal on Greece’s flailing bailout last Thursday, spurring a special summit of European leaders on Monday (June 22 2016). Greece’s €245 billion ($279 billion) bailout deal from other eurozone governments and the International Monetary Fund runs out on June 30. That same day the country faces a €1.54 billion payment to the IMF that it won’t be able to make without a new aid transfer.
4. China Stocks in Correction — Chinese shares suffered their worst week in more than seven years last week. Both the Shanghai and Shenzhen markets fell into correction territory. The Shanghai Composite (SHCOMP) finished down 6.4% at 4,478.36 and lost 13.3% for the week, marking the second time this year it has fallen into correction territory. Fears over liquidity and margin trading were cited as reasons for the declines. Year to date, Shanghai is still up 38.4% and Shenzhen is up 93.8%.
5. Bullish Sentiment Rebounded Last week — courtesy of BIG, the weekly survey from AAII, individual investor bullish sentiment rebounded from 20.0% up to 25.4%. In spite of the rebound, bullish sentiment has now been below 40% for 17 consecutive weeks. The last time we saw bullish sentiment below 40% for this long was back in the summer of 2012.

The week ahead — Economic data from Econoday.com:

Tags: Bullish Sentiment, China Market, Grexit

This entry was posted on Monday, June 22nd, 2015 at 10:32 am and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.