One has to hand it to Wall Street. It listens to some Federal Reserve governors talking about an overheating American economy and immediately sells the market. Then the first-quarter ECI figure shows that, while the economy is booming, employee costs are well under control.
Wall Street then turns turtle, decides that Federal Reserve chairman Mr Alan Greenspan isn't going to raise rates after all and everything is rosy once again. This reporter, for one, has long given up trying to make sense of the indicators coming out of the US.
Mind you, markets thrive on volatility and conflicting economic indicators are the surest way of generating volatility. Fortunes were made on Wall Street (and on other markets this week) as the Dow first collapsed and then recovered strongly after the employee cost figures suggested that interest rates would hold at current levels.
The two big corporate events of the week were Elan's unexpected $700 million (£494.6 million) acquisition of Neurex and confirmation of the market's worst-kept secret - the merger talks between JS Corp and Stone Container.
This latter deal has been described unkindly as not just a merger of two big packaging companies with lots of debt, but also a merger "of the two biggest egos in the box business", as one contributor to Stone's Internet bulletin board put it.
Whatever about egos and whether Dr Michael Smurfit or Mr Roger Stone ends up running the merged business, it seems pretty clear that, on strict financial criteria, the merger makes eminent sense for both companies. Savings of up to £450 million, asset sales of anything between $2 billion and $3 billion and a more streamlined structure should enable a merged JS Corp/Stone to capitalise on its position as the US leader in containerboard.
Analysts in Dublin believe that the Smurfit share has the capacity to go beyond 300p if the merger is consummated. That will provide some relief for Smurfit's suffering shareholders, although any shareholders hoping to see a share buyback will probably be disappointed as Smurfit will probably have to inject more than £500 million into a merged JS Corp/Stone to bring its stake to a realistic level of 3540 per cent.
A couple of years ago, most Irish fund managers scoffed at the prospect of putting money into Elan. Usually the reason was that they didn't understand the company, questioned its quality of earnings, its absence of dividends and even its choice of Nasdaq for its primary listing.
Now, with the acquisition of Neurex for $700 million of its own shares, Elan has hurdled CRH to take the number three position on the Irish market and seems well set to become the biggest company on the market within a few years.
Given Elan's exponential growth and the expected slowdown in earnings and share price at AIB and Bank of Ireland postEMU, NCB believes that Elan will be number one in three years time.
And with Icon floating on Nasdaq and Trintech expected to follow, no wonder Irish brokers are investing heavily in coverage of the Irish high-tech sector.
