Hertz Is Star Stock As Dow Hits Final Record High of 2013

Good morning, good lookin'. Here are the three things you need to know on Jan. 2.

Jan 2, 2014 at 11:00AM
Still trying to figure out a New Year's resolution? Eating more kale and buying more incense for your girlfriend don't count (we suggest getting your friends to sign up for MarketSnacks so they can understand Wall Street as well as you). The Dow Jones Industrial Average (DJINDICES:^DJI) rocketed 72 points with its 52nd record high of 2013 on Tuesday -- that caps 2013 as the best annual performance in 18 long years (back when the Ninja Turtles were big).

1. Hertz rental car jumps 10% after "poison pill"
Hertz Global Holdings (NYSE:HTZ) is unleashing the poison pill, making it difficult for a single shareholder to amass a large chunk of ownership. The gold car rental company announced a one-year "rights" plan whereby if any single shareholder buys more than 10% of the shares out there, the number of shares can double, diluting the menace shareholder's value.
Things seem quiet in rental-land, but beneath the surface there's frothy activity. Trading activity of Hertz stock is spiking, and it's suspicious. Some investors may be accumulating stock on the open market, which could quickly give that shareholder massive decision-making power in the company. It's making Hertz queasy.
Show yourself, activist investor! Hertz management stressed that they're happy to consider shareholder ideas (including the in-car hot cocoa machine), but that shareholder must identify himself, arrange a meeting, and not scare them. The spike in trading activity is anonymous now, so the board is protecting its control of the company with a kung-fu grip.  
Hertz shareholders were impressed. Remember when LinkedIn said people viewing your profile is spiking? Hertz loves the attention, too. After already climbing 59% on increased business and personal traveling in 2013, the stock drove 10% higher Tuesday on the news.

2. Consumer confidence rockets into 2014
"Cocky" is the word of the day. That's because, according to The Conference Board's monthly survey of consumer sentiment, Americans' confidence in the state of the economy popped in December from 72 to 78.1 on the research firm's scale -- that's the best year-end reading for the consumer confidence report since '07.

Why all the smiles? Good econ data in the final quarter of 2013. Home prices have risen and sales have increased. Manufacturing activity, which makes up 12% of the U.S. economy, has grown for cars and construction materials. And most of all, the 203,000 new jobs added in November slammed economists' expectations, and the unemployment rate dropped to a five-year low of 7%. That's why consumers are popping bottles into 2014. 

3. Home prices hit seven-year high (again)
According to the mother of all housing market reports, U.S. home prices rose at the fastest rates since 2006 (the pinnacle of that devastating housing bubble) for the second straight month. The S&P Case-Shiller home price index tracks prices for single-family residences in 20 metropolitan areas, reporting Tuesday that prices popped 13.6% in October from a year earlier.

However, although the housing market has battled back strong in 2013 (home prices in all 20 cities surveyed are up from last year, and sales increased, too), the S&P Case-Shiller report also showed that the high-flyin' prices are slowing down a tad. The pace of the price increases in 18 cities dipped slightly from August to September and then from September to October. 

  • ISM Manufacturing Index
  • Weekly jobless claims

As originally published on MarketSnacks.com

Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends LinkedIn and owns shares of Hertz Global Holdings and LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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