Meanwhile, Deutsche Bank has cut its Apple price target to $295 from $305.
From MarketWatch:
Apple could see a hit of nearly $5 billion due to COVID-19’s spread in China, but signs point to supply issues easing next month, according to analysts at Deutsch Bank. In a note Thursday afternoon, analysts reduced their estimate for Apple’s fiscal second quarter, which now stand at earnings of $2.69 a share on sales of $60.4 billion, down from $2.99 a share on sales of $65.1 billion. The reduction was due to the effects of the new coronavirus spreading through China and the resulting inaction in an important country for Apple’s manufacturing and sales, but analysts said that reports from iPhone manufacturer Foxconn Technology Co. Ltd. suggest effects should decline after March.
My take: Fasten your seatbelts.
Agree! We surely will be testing new market lows in the coming days and perhaps weeks. So much still is unknown about this virus. By paramount concern is over the question does it get better following treatment only to lie dormant and manifest itself once again in the human body, flaring up?
I heard an experience investor say on CNBC yesterday that if you have a stock whose fundamentals you know are sound during these periods then you should be ever deeper in love with that stock. What he means is that you now have a propitious opportunity to buy even more shares at a bargain.
I upgraded very good Spreads because they were over $20 in-the-money. The new spreads – $287.50/$290.00 – (with the pre-market crash) are going to expire worthless (or nearly so).
“Here we go again. Analysts chase the stock lower.. until the stock reverses and then they reverse again.“
Someone else suggested these are largely the same folks buying and selling on both sides. And shocker – the stocks were led way down in the premarket, where volumes are greatly reduced.
“Nothing to see here, folks. Move along.”
2019 was historically such a powerfully firm run-up year for AAPL it could be construed as the beginning of the death knell of the “Apple is doomed” meme with AAPL finally gaining the respect in the market it’s continuing performance and vision has long demanded.
Proposing that the entirety of 2020 will end up a standstill, supplants panic and fear (never good investing emotions) with a more healthy wait-and-see patience obviated by the fact that, from this viewpoint, no one knows how things will fair out in the near term.
It’s a tortoise v hare mentality. Patience wins.
There has been virtually no testing here yet.
What does this mean? That as soon as testing is available and actual virus data is collected here, there will be a lot of cases reported.
Why? Because quarantines of flights from infected countries didn’t begin here for weeks after it was first reported. So of course there are a lot more infected people here – they just haven’t been identified or reported yet.
Not to mention U.S. health experts have been hamstrung because the response from this administration has been a politically infused, unmitigated amateur hour.
I hope I’m wrong, but I expect the stock market to crash further as soon as test kits are widely available and real virus numbers start to get reported. And AAPL can easily revisit its 20% “correction” price around $260 again.
Because the “news” media is going to continue to scare the shit out of everyone 24/7 the millisecond this data is rolled out. Because that’s what they live for.
Forgive my cynicism. But the facts speak for themselves. As do the lack of them.
If “substantial’ virus cases start to show up in cities like say, NYC – a large population – it would not surprise me if there was a bonafide initial panic to whatever degree, in which case i expect a full blown market crash – though short lived.
Personal anecdote:
I live in NYC, and went to Whole Food the other day to buy quinoa – where they have open bins for buying by weight, etc. They were completely out of quinoa and many other grain bins were empty too. Never seen this before. I was told they may not be replenished for maybe a month.
Further inquiry informed me that quinoa isn’t grown in China – but it is refined there.
An aha moment.