Will Microsoft Make Money From Skype?

The market is higher again in early trading, after Europe breathes a sigh of relief with respect to Greece. Greece completed a successful debt offering, issuing 1.625 billion euros of 26-week bills that drew an average yield of 4.88%.

This helped push European markets higher this morning, which likely aided sentiment here when our markets opened. Asian markets were mixed overnight.

Also in the news is a deal by Microsoft (MSFT) to buy Skype for $8.5 billion in cash. Considering eBay couldn't make any real money with Skype, I highly doubt MSFT will do any better. I love using Skype on my iPad, but I don't think it will move the needle for MSFT. And with a price tag of $8.5 billion, it looks like they significantly overpaid for this asset. Silver Lake Partners bought the company from eBay a few years back for closer to $3.5 billion.

Among the sectors, utilities and financials are leading the action, which is an odd pair. Healthcare is lagging the action so far.

The dollar is flat; gold prices are higher to $1515; and oil prices are up slightly to $103. The CME raised margin requirements in oil futures to help curb speculation. When they did this to silver, it killed the momentum in that commodity. I doubt it will have the same effect on oil, but it might help a bit at the margin (no pun intended).

The 10-year yield is fractionally higher at 3.16%, but has basically been on a one-month slide lower. The volatility index (VIX) is -5% lower today to 16.25.

Trading comment: Color me surprised by the strength in the market this morning. Of course, its still early, so it needs to hold. But overall things look good here. Stocks that sold off after earnings are bouncing back, and energy stocks that were hit last week are rebounding nicely as well. AAPL has been coiling in a consolidating fashion for nearly three weeks now, which makes me think an upside breakout could be in the works.

long AAPL