Category Apple

Apple: Ready to Take Another Bite?

Apple is ~15% off its all time high as it lags its large cap peers. Concerns of iPhone growth and China have rattled investors. However, it's not unusual for this stock to pull back. Since 2107, we have seen 11 retraces - offering patient investors buying opportunity. From my lens, Apple is a reasonable long-term buy around $165. And if you can get it cheaper - add to it. Over the next 3 years - I think it will be well over $200 as earnings top $8.00 per share.

Something Doesn’t Add Up… 

It's Nvidia's world and we're living in it (if you believe the stock market). The S&P 500 (and Nvidia) recorded all new highs post the AI chip maker's earnings. Be careful paying too much. The rapid rise in Nvidia's market cap has only seen the market narrow further. And from mine, that makes it more subject to both volatility and risk. Deutsche Bank’s Jim Reid dimensioned the risk another way. He shows how the Top 10% of stocks in the S&P 500 constitute ~75% of the total capitalization. We have not seen that since 1929! The only other time we saw something similar was the dot.com bubble...

Yields Rally on “Strong” Jobs Data

According to the BLS - we saw the strongest employment growth in 12 months alongside the fastest wage growth in 22 months (0.6% MoM). However, we also saw the lowest amount of weekly hours worked since 2010. Given the better than expect jobs gains and acceleration in wages (which remains well above the Fed's objective) - it seems less likely the Fed can justify rate cuts in March. Probabilities for a cut in 2 months stand at 38%. This was above 70% just a month ago.

Santa’s Rotten Apple

What happened to the Santa Clause Rally? Bahhh humbug! For those less familiar, a Santa Claus Rally involves a rise in stock prices during the last 5 trading days in December and the first 2 trading days in the following January. Over these 7 trading days in question, stock prices have historically risen 76% of the time (to the tune of ~1.3%) - far more than the average performance over a 7-day period. But this year the market received a fat lump of coal. Or more accurately - perhaps a "bad apple". Some feel that's potentially a bad omen for the year ahead... giving rise to the popular Wall St. maxim "... if Santa Claus should fail to call, bears may come to Broad and Wall"....

Will This Market Rally Continue?

Did we finally hear a 'less hawkish' Jay Powell yesterday? For the first time in months the Fed Chair may have slightly lowered his guard. But barely... as Powell is far from being a dove. A dovish Fed is one that is (a) cutting rates; and (b) ending quantitative tightening. Neither of those things are happening soon. But it wasn't just Powell's language which fired up the bulls. Janet Yellen also played a role - suggesting the government plans to sell less debt than expected... sending bond yields lower.

Apple: An Incredible Business – But Don’t Overpay

This week the final two mega-cap tech names reported Q2 earnings. Amazon handily exceeded what were very low expectations. AWS (Cloud) sales rose 12% year over year - much better than feared - given the soft results reported from Microsoft's Azure. This sent the Cloud and eCommerce giant higher by ~11% . On the other hand, investors had a very different reaction to Apple's earnings. The iPhone maker's results were mostly inline. But "inline" is not good enough when it's trading ~30x to 31x forward earnings. So what is the right multiple to pay for Apple? And can it reignite growth looking ahead?