Summary:
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US futures in the green ahead of cash open
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S&P500 close to 3000 handle
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AT&T shares to rally after activist takes stake
Equities have made a fairly solid start to the new week with major benchmarks in Europe in the green and the German Dax trading back above 122000 and at its highest level in over 5 weeks. The moves appear to be little more than a continuation of what we saw last week as stock markets enjoyed impressive gains across the board. A soft NFP release and slightly less dovish than expected speech from Fed chair Powell on Friday evening failed to impart any significant sell-off and after a rock August, September is providing a far more sanguine environment for investors so far.
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The S&P500 is back near the 3000 handle after rallying 175 points (6%) from the low seen at the start of the week before last. The 8/21 EMAs have turned positive once more. The last couple daily candles have wicks above showing that the market has failed to close on its highs, but this doesn’t mean too much unless there’s a daily reversal candle with the market still making higher highs and higher lows in each of the past 4 sessions - on course for a 5th today. Source: xStation
Shares in AT&T are expected to jump this afternoon after activist Elliott Management announced a $3.2B stake in the firm. The activist investor led by Paul Singer sent a letter to the board of directors for AT&T with suggestions for business improvements and believes the company’s stock could ultimately go as high as $60 per share - around 65% above Friday’s closing level of $36.25. “The purpose of today’s letter is to share our thoughts on how AT&T can improve its business and realize a historic increase in value for its shareholders,” the memo states. “Elliott believes that through readily achievable initiatives -- increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight -- AT&T can achieve $60+ per share of value by the end of 2021.” The stock is called to begin higher by around 7-8% near the $39.00 mark according to pre-market trade.
Shares in AT&T are called to start above the 61.8% fib at 37.33 this afternoon, with shares soaring in the premarket after news broke of Elliott Management’ stake. The past couple of years haven’t been the best for investors in this stock but with price back above both the 50 and 200 SMA the longer term trend has turned higher in recent months and the latest news could provide another sustained boost. Source: xStation
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