Foxconn talks, Apple pops

Nothing reassures nervous investors like a schedule.

apple reuters coronavirus popFrom Ben Winck’s “Apple adds $18 billion in market value after its Chinese factories accelerate post-coronavirus re-openings” posted on Business Insider Wednesday:

  • Apple gained as much as $18 billion in market value on Wednesday following a report that its Foxconn iPhone plants will speed up their return to normal production.
  • The Chinese factories were closed for weeks due to a coronavirus-related shutdown, but Foxconn now expects to reach 50% output by the end of February, Reuters reported.
  • The manufacturer, which produces Apple’s iPhones and Airpods among other products, also hopes to resume 80% of all China production in March, according to Reuters.
  • Apple lost as much as $27 billion in market cap on Monday after a previous Reuters report noted two factories were authorized to reopen but only had 10% of their employees available.

My take: Apple is Reuters’ bitch this week.

See also: DED calls FUD on Apple coronavirus reporting

18 Comments

  1. Gregg Thurman said:
    Along with the improved sentiment towards Apple/AAPL, I’m showing another all-time high being established this week.

    2
    February 12, 2020
  2. Gregg Thurman said:
    Yesterday I purchase FEB 14 $315/$317.50 Call Spreads at $1.95. Had I not slept in I might have bought lower strikes at the same price. Oh well.

    Today I tried to add to my position at $2.15 but have been unsuccessful so far.

    The hard part of my trade strategy is being comfortable that AAPL’s intraday low has been established. I miss most of them waiting for my comfort level to be satisfied. With AAPL’s Opening print on Monday, I stayed on the sidelines until my confidence that AAPL had rejected the latest rumors was satisfied. Yesterday and today are also good examples of shaken confidence stemming from the Wuhan Flu media speculation mill.

    0
    February 12, 2020
    • Paul Brindze said:
      I do effectively the same strategy, but by selling put spreads. No buy back cost if they expire out of the money. Like you, usually don’t get at low point, but often too early, rather than too late.

      Took more risk than usual this week 317.50 – 320.00. Sold way too early yesterday at 0.92. Looks like I will be fine, anyway.

      0
      February 12, 2020
      • Gregg Thurman said:
        92 cents is more than I’ll make with my Call Spreads. I don’t believe I keep enough in my account to sell Put Spreads. I’ll have to check with Schwab about that.

        0
        February 12, 2020
        • Paul Brindze said:
          Put spread margin requirements should be about the same as call spread cost. Max loss is the spread. So $2.50 in my case … $250 times number of spreads sold.

          Need to watch carefully, though , to avoid ending in middle of the spread. You get stock put to you and not worth exercising lower one at other end which is below current price. Max loss still $2.50 but a major pain managing your account.

          0
          February 12, 2020
          • Gregg Thurman said:
            Schwab wants $30,000 cash reserve for each Put Spread sold. I’m going to call back after I return from my KU (Go Jayhawks) trip this weekend and see if I get someone else with a different opinion. $30,000 per contract sold seems a bit rich.

            0
            February 12, 2020
  3. Aaron Belich said:
    Ugh, weren’t factories closed for weeks because of Chinese New Year, but then extended due to Coronavirus infection rates? Fantastic reporting continues! /s

    And can we stop with the non-sense of equating short-term traders with “investors”? Isn’t an investment a long term concept? Or is such terminology still open for debate?

    4
    February 12, 2020
  4. Robert McDonald said:
    My take:
    1. The Chinese government has made a risk decision to restart production be damned despite the fact that there will be significantly more outbreaks and deaths as a direct result. I can only guess they are thinking that the death rate is only an estimated 1-2% for Coronavirus vs.a mortality rate for SARS and MERS of 9.5 and 34.5 percent respectively. To put this in perspective ordinary flu has a death rate of about 1-2% along the lines of the Coronavirus.
    2. I would expect that they are preparing the equivalent of swat teams to beat down any new outbreaks as quickly as possible.
    3. The full rollout of 5G will inevitably be delayed reducing expectations for a gang buster year for Apple, Huawei and others supplying parts and product.
    4. Apple will obviously do what it can to keep its development and production moving forward vs what will likely be many set backs:

    ‘iPhone 12’ production may fall behind schedule ….’
    http://appleinsider.com/articles/20/02/12/iphone-12-production-may-fall-behind-schedule-because-of-coronavirus

    0
    February 12, 2020
  5. John Dragos said:
    Way too much panic over a virus with a 2-3% mortality rate (primarily amongst individuals that had previous health issues). Hoping the worst of this is over.

    Aaron I think people are using a more modern day definition of investor “A individual who actively participates in the financial markets”. The manner in which one participates is largely a matter of preference. You could buy stock and hold forever or day trade on the latest news cycle, both are equally valid strategies if we agree an investors goal is to profit.

    2
    February 12, 2020

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