Let’s Make A Deal
Happy Tuesday, y’all. As if Syria, Labor Day weekend and ripping futures over the weekend weren’t enough, Microsoft $MSFT decided to kick off September with a shell shocking acquisition of Nokia’s $NOK hardware business and related patents for $7 billion. Nokia’s shares are surged roughly 50% higher upon announcement of the deal. If this is Steve Ballmer’s last hurrah as CEO, he’s certainly going out on a questionable note at best, and markets appear to be echoing that sentiment this morning.
Microsoft’s foray into the mobile hardware business has been nothing short of a catastrophe after the utter flop of the Surface tablet, and Windows phones have been an abject failure as well. Perhaps Microsoft feels it can do better than what Nokia has done with the operating system, but Nokia has been a failing business for the better part of a decade after once controlling the mobile phone market. Given the prevalence of Android phones and the profit hording from Apple’s iPhone line, we have seen former heavyweights such as Nokia and Blackberry fall from grace, and perhaps an acquisition of Blackberry is the next domino to fall in the smartphone arms race. Ballmer was quick to characterize the Nokia acquisition as a “win-win” for all parties, but it’s hard to see how this is a victory for Microsoft.
S&P futures are maintaining momentum after worldwide markets rose virtually across the board on Monday, though many international indices are flat to slightly negative this morning. The first hour of this morning’s session figures to be a chaotic one to say the least, and we will likely see a surge of volume as the US market should be operating at full bore for the first time in weeks. Sessions like these make it difficult to take early action as markets can turn on a dime when volume is readily available and a number of external variables exist, but those who leaned long last week will have an opportunity to let positions ride on the open and determine whether to take profits or extend.