Market Morning: AT&TWarner Wins, Rate Hike Jitters, Brexit Brouhaha & Bitcoin Bashed

AT&TWarner Now A Thing, Says Judge, As Game of Thrones Changes Hands

Remember the AOL Time Warner merger at the turn of the millennium that nobody really understood? This isn’t that. Yesterday, Federal Judge Richard Leon gave his judicial OK in a 172 page ruling  to AT&T’s (NYSE:T) $85 billion purchase of Time Warner (NYSE:TWX). AT&T is down over 2% premarket, a very big move for one of Wall Street’s most stable stocks. Time Warner is up 4.6% so far, since they will be the ones getting the $85 billion. AT&T’s premarket slide has pushed its dividend yield up to 6%. In what is being hailed as a “complete and total victory” for AT&T by a frustrated Justice Department that sought to torpedo the deal on the insistence of President Trump, AT&T justified the merger by saying it was needed to complete with Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX).

Twenty-First Century Fox (NYSE:FOX) is flying high in the premarket because the ruling means Comcast (NASDAQ:CMCSA) can go ahead and buy it now.

Practically though, this means that the final season of Game of Thrones will now be property of AT&T. When you play the Game of Antitrust, you win or you die. Merger is coming. June 20th.

What to do: AT&T looks like a good income play here. A 6% dividend is hard to beat for a stock so stable these days.

Eyes on Gold, Inflation, as Wall Street Assumes Fed Rate Hike Imminent

The Federal Open Market Committee will announce its decision on an interest rate move today at 2pm EST. There is near unanimous consensus that the Fed will sell Treasuries and sop up liquidity in order to push the overnight borrowing rate up a quarter of a point. With inflation as measured by the CPI at a 6-year high of 2.8% a year and climbing, the Fed has already overshot its inflation target by nearly a full percentage point. Gold (NYSEARCA:GLD) has been stuck in a tight $30 trading range since May 15th, and whatever happens is expected to knock it out of that range in one direction or another.

What to do: If you’re into options, a gold straddle or put spread could be profitable here. But the real excitement will come if inflation hits the 3% mark. Then what happens? And where will the bond market be at that point?

Brexuhwhoosawhatsit? UK PM May, Rebels, Remainers, Brexiteers, All Confused and Angry

After a long-hyped vote in the British House of Commons that was purported to be the one to solve the question of whether Parliament would get a right to veto any Brexit deal worked out between Prime Minister Theresa May and the Euro masterminds in Brussels, surprisingly or not, still nobody knows what’s going on or what they just voted on. So they keep arguing. The Remain camp believes they won because they say May made a compromise allowing them a meaningful vote, and the Leave camp says that was never agreed on, and they have no idea what the Remainers are talking about. What everyone agrees on though is they are upset with Theresa May, who is probably a bit stressed about all this, and would probably like to speak with Margaret Thatcher about now if she could.

Related tickers: UK Bank stocks could get volatile from here: (NYSE:BCS) (NYSE:HSBC) (NYSE:RBS)

McDonald’s Looks to Decentralize, Lay Off Corporate Execs, Support Franchisees

This never happens to bureaucracies. McDonald’s (NYSE:MCD) has announced plans to essentially decentralize by cutting corporate staff and increasing support for franchisees. Company leaders believe this will enhance profitability as the stock continues to break to ever new highs.

What to do: Go back in time to 2002 and buy McDonald’s. You’d have been able to have a lot of fries with that.

Bitcoin Continues Getting Bashed, Double Bottom Threatened

Bitcoin (BTC-USD) just broke through $6,500 as it continues its decline, now down 6% in the last 24 hours. It’s actually doing the best in the cryptocurrency complex today, with other altcoins ether (ETH-USD), ripple (XRP-USD) and bitcoin cash (BCH-USD) down 11-12%. Double bottom remains at around $6,100. Break through that floor and the next floor could be a long way away. Will bitcoin recover as it has in the past? Let’s wait and see.

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