Premarket: Apple is red

From the wsj’s “Tech-Stock Futures Fall as Democrats Lead in Georgia Elections” posted early Wednesday:

U.S. tech-stock futures tumbled Wednesday as investors bet that the Democrats were poised to take control of the Senate following early results from Georgia’s runoff elections.

Futures tied to the technology-heavy Nasdaq-100 index fell 1.7% on expectations that a Democrat-controlled Congress would lead to higher taxes and tighter regulations on tech giants. S&P 500 futures were down 0.3%.

Dow Jones Industrial Average futures rose 0.2%, while those tied to the Russell 2000, which tracks smaller stocks, jumped 2.7%. Both indexes are filled with companies beaten down by the coronavirus pandemic that stand to benefit from higher fiscal spending.

Big tech names were getting hardest hit. In premarket trading, Amazon,Alphabet, Netflix and Facebook were down more than 2%. “The negativity today is concentrated in these large cap, growth stocks, where, frankly, valuations are already quite high,” said Mike Bell, a global market strategist at J.P. Morgan Asset Management.

Meanwhile, stocks hit hard by the pandemic such as banks and industrials were jumping. Bank of America and Wells Fargo shares rose 2% premarket. “You are going to see the market viewing this as positive for the value stocks because of fiscal stimulus,” Mr. Bell said.

My take: Apple was not spared in the Georgia sell-off. Buying opportunity?

6 Comments

  1. Tommo_UK said:
    As I commented yesterday, I’m not surprised to see a Georgia downdraft, but uncertain why AAPL seems to be being hit harder than FB, AMZN or GOOG in the pre-market, all of which are far more vulnerable to prosecution and legislation – even to the point of being broken up – than Apple if the Dems win both houses.

    2
    January 6, 2021
    • Jerry Doyle said:
      @Tommo_UK: I suspect it is the initial knee-jerk reaction to what many political naive investors perceive as the political uncertainties of a Democratic Party sweep. In the short term (two years) I see nothing but “positives.” The Democrats will push through greater fiscal spending and increased stimulus, such as $2,000 checks per individual. Biden knows now is not the period to raise personal income taxes or even corporate taxes, so I suspect that increased revenue sources to fund programs will not gear-up during this two year period before mid-term elections.

      With humongous new stimulus poured into an already overflowing stream of liquidity the dollar will fall further and the markets will explode going forward. Additionally, Biden has the support of Janet Yellen for additional stimulus. The good Chairwoman will do her part to pour even more stimulus into an already flooded stimulated economy. All this is good for stocks and for Apple. May be too good.

      3
      January 6, 2021
  2. The Georgia Senate races are leading some investors to sell the news but it would be foolish to expect higher capital gains taxes to stymie phenomena such as Robinhood, 5G adoption, work-at-home trends or overall economic recovery after a pandemic. I detect an eagerness to get out of the house among the self-isolated (Note: They aren’t completely self-isolating, I see them at outdoor brewery gardens. Last night I asked who had gotten their $600 checks, everyone raised their hands. Breweries are very popular places now.) RVs and camping will be popular again this summer. By August the US economy will be rolling along with back to school spending and households replacing worn out appliances.

    1
    January 6, 2021
    • Jerry Doyle said:
      @Thomas Williams: Over the Christmas Holidays I took a road trip (solo) to spend Christmas Eve and Christmas Day at the Biltmore Estates in Asheville, NC. It was a 1600 mile r/t drive for me. The roads, interstates were jam-packed, literally. I crawled for 45 minutes in bumper-to-bumper, stop-and-go traffic for about three miles through downtown Atlanta, GA Mix-Master and then slowed to another 30 minutes of crawl north of downtown Atlanta. Even on the rural interstate both lanes were packed. If you moved into the right lane, you had to wait quite a period to move to the passing lane as the passing lane was filled with bumper-to-bumper traffic. Please accept that what I write is no embellishment.

      There may be people home nesting, but they have to be deep in the minority. As an add note, I would say that folk wearing masks were in the 75 percentile. I estimated 1 in four people I encountered wore no masks, some entire families with children.

      Businesses were good with distributing and placement of hand sanitizers except fueling stations. At no time did any fueling station have hand sanitizers next to the fuel pump handles, which have to be touched as often, or more, then grocery carts.

      1
      January 6, 2021
  3. Yes, Jerry the holidays were a time many got in cars to see family, especially in the South. I was among them to spend the holidays with a retired B-29 pilot, Dad, and drive my bee product distribution route. But once again the highways are desolate, in the Mid-Atlantic states especially. EZ-Pass stats reflect this. The real hit is to all the small businesses now shuttered in poor communities. Restaurants, retail shops and auto repair places that were successful in 2019 are boarded up from New York to Virginia. Virginia Beach is thriving, military spending helps. Rural counties are wiped out, their budgets decimated. The divide between 1% and 99 % has never appeared so sharp, IMHO.

    0
    January 6, 2021
  4. Tommo_UK said:
    Meanwhile, the lead times from network-provided iPhone Pro Max 512GB models is up to 28 days in the UK.
    1-2 weeks from the Apple Store.

    1
    January 6, 2021

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