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 was a big week in terms of economic data with the jobs report, the beige book, housing information, trade deficit information, and, of course, the potential for conflict in Syria. But even with all those headwinds, the markets looked strong this past week, and after four consecutive weeks in which the Dow Jones Industrial Average (INDEXDJX:.
Before we hit the Dow Jones Industrial Average (INDEXDJX:.DJI) losers, let’s look at this week’s best performing component. JPMorgan Chase & Co. (NYSE:JPM) gained 4.01% this past week, mainly on the announcement of the two major M&A deals reported on Monday. JPMorgan Chase & Co. (NYSE:JPM) is reportedly one of the lead underwriters involved in Verizon Communications Inc. (NYSE:VZ)‘s $130 billion buyout of Vodafone‘s 45% stake in the joint venture Verizon Communications Inc. (NYSE:VZ). That deal alone is estimated to line JPMorgan Chase & Co. (NYSE:JPM)’s pockets with more than $600 million in fees. It’s also likely that the company will be involved in the Microsoft Corporation (NASDAQ:MSFT) –Nokia deal, and while that won’t be as lucrative for the bank, it’s sure to make some decent coin.
The big losers
Speaking of Microsoft Corporation (NASDAQ:MSFT), it was the Dow Jones Industrial Average (INDEXDJX:.DJI)’s biggest loser this past week, falling 6.73%. That decline comes after the stock lost 3.88% two weeks ago, making it one of the Dow’s worst performers back then, too. The previous fall was related to the belief that the Xbox One will perform poorly this holiday season, and this one came following the announcement that the company is purchasing Nokia’s handset business and the rights to the company’s patents for the next 10 years for $7.2 billion. This move will give Microsoft Corporation (NASDAQ:MSFT) not only the software to run a smartphone but now the smartphone hardware. Many investors are debating whether this was a good or bad move by Steve Ballmer, who has already announced he will be leaving the company within the next 12 months. This development will surely put the new CEO in a tough position.
Verizon Communications Inc. (NYSE:VZ), meanwhile, lost 2.19% this past week after the company announced over the holiday weekend that it had come to an agreement to purchase the 45% stake Vodafone owned of Verizon Wireless. While on the surface that sounds like great news — full ownership, full profit retention, full control — it will cost Verizon Communications Inc. (NYSE:VZ) $130 billion for all those things, and the company will rack up enough debt to prevent it from pursuing other growth opportunities for some time. That’s probably what scared investors off.