The Divorce Market

Everyone’s breaking up! At least it seems that way. Johnson & Johnson (JNJ) said it will break itself in two, consumer products and pharmaceuticals. General Electric (GE) will break itself into three—jet engines, power and healthcare. Toshiba (TOSBF) is also getting in the act. That company will break itself in three.

This is a big deal. JNJ is a Dow component. GE no longer is, but it’s an original member of the index.

It seems to me that there’s a natural energy working to keep companies from getting too large. In 1911, the government sued Standard Oil. The company was divided into 39 different companies. Standard Oil of New Jersey became Esso which later became Exxon. Standard Oil of New York (or Socony) later became Mobil and now today we have Exxon Mobil.

The same thing happened with AT&T. The government broke it up and the Baby Bells later merged back together.

A popular theme in some dystopian movies is massive evil conglomerates. In Stanley Kubrick’s 2001, the Orion is owned by…Pan-Am!!

Thanks to inflation, real wages are down and folks are not happy. Today’s consumer confidence report fell to a 10-year low. The University of Michigan Consumer Sentiment Index fell to 66.8. That was below estimates of 72.5.

The Labor Department said that 4.43 million Americans quit their jobs in September. That’s up by 1.1 million from one year ago. There are now 10.4 million job openings.

It’s a good day so far for stocks. On our Buy List, FactSet (FDS) and Sherwin-Williams (SHW) got to new highs today.

Posted by on November 12th, 2021 at 1:10 pm


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