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Stocks traded sideways Tuesday with a modest upward bias. No major catalysts were in sight except for waves of positive and negative sentiment over the Brexit vote in the United Kingdom.
Polls over the weekend suggested the British people are on track to vote on Thursday to continue to live under the thumb of their European Union overlords in Brussels, while Tuesday polls suggest the “Leave” and “Remain” camps are neck-and-neck.
Markets would clearly like to see a “Remain” outcome…but, you know, markets are pretty self-interested.
Investors hate change because it would throw all their models of profitability and money flows into disarray. But investors are hardly the best ones to decide. Investors love cancer-causing cigarette makers; they love death-inducing machine gun makers; they love obesity-causing fast food makers. They love basically anything that is predictably profitable, and preferably addictive.
So, the fact that the markets love the idea that the United Kingdom is more likely to keep its sovereignty subjugated to the whims of bureaucrats in Belgium is not such a great thing. It is just a thing, and it is something that we need to understand and appreciate.
Back here in the United States, the energy sector took the lead, while health care lagged on pharma and biotech weakness. Today, I’m seeing opportunity in a data-center real estate investment trust (REIT) along the lines of our successful trade in CoreSite Realty Corp (COR).
CyrusOne Inc (CONE) is a $4.1 billion, Texas-based company whose shares are under accumulation now as investment managers seek to gain more exposure to the REIT industry.
Buy CONE at $52.05 limit, good till canceled.
Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments. Follow him on Twitter for his latest take on markets and innovation.