I am referring here to corporate America. What they are doing is spending to make acquisitions. Today alone two deals were announced: Wal-Mart will spend $4 billion to buy a major African retailer, and Unilever (maker of Dove and Vaseline) will expand its personal care business by buying Alberto-Culver (VO5 shampoo). There is merger activity in many industries and it is not limited to the US. Chinese companies are making deals in mining and consumer products.

As investors ignore the stock market and put their cash into bonds at high prices and low yields, manufacturers are buying real, productive assets at prices they deem reasonable. You can buy a 2-year US Treasury bond that will pay less than 4/10ths of one percent annually. The average dividend yield of the stocks in the S&P 500 that pay dividends is over 2%.

Watch what they do - watch them buy. The takeaway: stocks on the whole still look cheap.

GTC

(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).