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Welcome to CrushTheStreet.com’s Weekly Market Wrap-Up!

Welcome to CrushTheStreet.com’s Weekly Market Wrap-up! The top story of the week focuses on Coca-Cola, one of the most iconic corporate brands that is synonymous with both free-market capitalism and the intangible virtues of the so-called “American Way.” Analysts from Nomura Securities raised their share price target from 51.50 to 54-dollars, suggesting that the world-renowned soft-drink manufacturer has the potential for a leveraged buyout in a similar vein to last year’s Heinz acquisition by Warren Buffet’s Berkshire Hathaway and 3G Capital Management. Should such a deal take place, Nomura estimates that a share price target of more than 90-dollars is reasonable and that under an LBO, a revitalized Coca-Cola could potentially quadruple its market capitalization, which currently stands at $180 billion dollars.

This may be welcome news to long-term investors, who recently took a hit in their portfolios when Coke’s most recent quarterly performance showed a drop in earnings per share by 11.1-percent against the same quarter a year ago. The company has slogged through a declining trend in this key metric throughout much of this year, a victim of revenue underperformance against the industry average. Share price dynamics became particularly volatile in mid- to late- October, losing 6% of valuation on the 21st. As it stands, Coke is barely in the black year-to-date, up around 3-percent.

The rumors of a leveraged buyout, or an attempt by employees, management, or investor group to purchase an organization primarily through borrowing, is not the first time interesting undercurrents have placed the beverage-maker in the limelight. A few months ago in June, Warren Buffet quashed speculation forwarded by money-manager David Winters that Coke would be taken private. Prior to issuing the controversial statement, Mr. Winters had sent letters to the company’s key shareholders, board of directors, and Buffet, criticizing management’s 2014 equity plan as a path that would lead to an erosion of the company’s per-share valuation. At the time, the market responded positively towards the speculation, sending Coke shares higher before a sudden wave of selling pressure in July temporarily caused prices to go negative for the year.

Recent activity suggests a repeat of the swing-trading opportunity. In the derivatives market, unusually large volume of call options were acquired for the November 7th expiry with a strike price of $41 dollars. Further out, there was substantial demand for the “January 45 strike calls,” suggesting that the big money players are gambling for a quick turnaround in sentiment. With so much keen focus on this iconic brand, everyday investors may want to place Coca-Cola as a primary consideration!

In financial news, the domestic market shot up on strong U.S. growth data and hawkish statements from the Federal Reserve indicating a sooner-than-expected rate hike. The Dow Jones index benefited the most, adding 221 points to close Thursday at 17,195, while the S&P 500 gained nearly six-tenths of a percent to come inside 6 points of the 2,000 point threshold. The equally strong performance of the dollar sent the precious metals complex tumbling, with gold dropping just below the critical 1,200 dollar support level, while silver hit 4-year lows, closing at 16.57. Palladium took another hard hit, sliding nearly two-percent to 783 on the ask. On the digital currency front, bitcoin managed to hold just under the 360 dollar mark throughout most of this week, although the optimistic economic data did drop the currency down slightly to 343 at last count.

And that will do it for this edition. Thanks for watching and we’ll see you next week!

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