Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
It's a light day for economic data, so investors and the Dow Jones Industrial Average (DJINDICES:^DJI) have to rely on some more readily available information. And a recent spate of new mergers and acquisitions is just the ticket to drive some market activity today. So far, the Dow is reacting positively, with an 26-point gain as of 11:45 a.m. EDT.
Three big deals
Over the weekend, there were a few big announcements about business deals. First off, the biggest of the three comes from pharmaceutical giant Amgen (NASDAQ:AMGN). The company announced yesterday that it would pay nearly $10 billion for Onyx Pharmaceuticals (UNKNOWN:UNKNOWN). The main objective? Capture the potential $1 billion in annual sales from its regulatory-approved blood cancer treatment, Kyprolis. Since Amgen's sales are largely focused on cancer treatments, with 40% of sales representing that market, the acquisition will fit nicely into its existing operations.
Also announced was the merger of BATS Global Markets and Direct Edge Holdings, two stock exchange operators. Both operate two U.S. exchanges, all four of which will continue to operate under the new merged company. Pending approval, the transaction is expected to be completed during the first half of 2014 and would create the second-largest stock exchange by volume -- surpassing the Nasdaq OMX Group (NASDAQ:NDAQ), but remaining behind the NYSE.
Finally, the Pritzker family, which operates a large private global industrial conglomerate, has agreed to buy TMS International (UNKNOWN:UNKNOWN), an industrial services firm that serves steel mills. The $1 billion deal will be a cash transaction and, subject to antitrust approval and other review, the deal is expected to close before the end of 2013.
The sudden flourish of business activity should be sending investors postive vibes, even if the overall economic scene isn't clear. Because businesses are willing to extend themselves in order to expand or capture new markets, even during continued economic struggles, that signals to investors that those firms have a positive outlook on future conditions.
The recent fixation on the Federal Reserve's plans for its stimulus policy has taken away much of the focus on long-term goals. By taking center stage this morning, these mergers and buyouts have given investors a glimpse of the long view while economic data continues to muddle the Fed-related picture.