“We have an equities market eager for a reason (any reason) to pull back.”
From an email sent Monday to Above Avalon subscribers ($):
For Apple, the risks found with coronavirus are significant. Slowing customer demand in China represent a risk to Apple as travel bans are expanded and people are recommended to avoid public areas. However, the much larger risk is found with Apple’s manufacturing apparatus.
A direct impact on Foxconn and Apple’s other contract manufacturers / suppliers from coronarvirus could be material as Apple’s product supply would be jeopardized. We then have to consider a scenario in which fears and anxiety spread to other countries including the U.S.
Set within this environment, we have an equities market eager for a reason (any reason) to pull back. The S&P 500 was up 10% in the past three months with little to no volatility. Based on current trading, the market is on track to give back about 20% of those gains from the recent high. AAPL shares haven’t been immune either.
My take: For Cybart, this particular glass is half-empty.
For contrary points of view, see: