Premarket: After blowout earnings, Apple is red

From the wsj’s “Stock Futures Point to More Losses on Wall Street; GameStop in Focus” posted early Thursday:

U.S. stock futures dropped, putting Wall Street on course to extend losses amid investor concerns about a slowing economic rebound and froth in markets, exemplified by the wild trading in retailer GameStop…

The stumble in stocks follows a strong start to the year that some investors say had pushed share prices beyond levels justified by corporate fundamentals. The selloff has taken place amid wild swings in individual stocks including GameStop and AMC Entertainment,AMC 301.21% fueled by a battle between day traders and hedge-fund professionals.

“There is some over-excitement in the market,” said Olaf van den Heuvel, chief investment officer for Aegon Asset Management in the Netherlands, pointing to the surge in GameStop shares as one example. “It was bubble territory.”

GameStop shares fell 8.5% ahead of the bell in New York, having rocketed 135% Wednesday. AMC dropped 23%, trimming Wednesday’s gains of more than 300%.

The slow vaccine rollout and Covid-19 restrictions in major economies have prompted investors to take some money off the table, Mr. van den Heuvel added. He said Aegon would likely view the selloff as a chance to buy risky assets when markets settle down.

Technology stocks dropped ahead of the bell in New York. Shares of Apple fell 3.4% after the iPhone maker reported its most profitable three months on record but didn’t provide specific revenue guidance for the current quarter.

My take: Beats me.

8 Comments

  1. Bart Yee said:
    The dichotomy:
    “The stumble in stocks follows a strong start to the year that some investors say had pushed share prices beyond levels justified by corporate fundamentals. ”

    “Shares of Apple fell 3.4% after the iPhone maker reported its most profitable three months on record but didn’t provide specific revenue guidance for the current quarter.”

    0
    January 28, 2021
    • Dan Scropos said:
      Do people even listen to the call? It still baffles me that people listen to the analysts more than they do Tim and Luca.

      Highlights for me—Double digit sales growth for all categories, iPhone 12 Pro and Pro Max remain in tight supply, margins in FY Q2 should remain flat Quarter over Quarter, 75% of Apple Watch purchases were by new users (astounding), and Forex did not play a major factor in gross margin.

      3
      January 28, 2021
  2. Timothy Smith said:
    Tim Cook: “If you look at the switcher or the switchers, if you look at the new to Mac and new to iPad, these numbers are still about — at a worldwide level, about half of the purchases are coming from people that are new.” If I own an iPhone, and I buy my first iPad, am I “new”?

    1
    January 28, 2021
  3. David Drinkwater said:
    Buy. And hold. Good companies.

    Relax. Rinse. Repeat.

    If need be, take a bath instead of a shower.

    Apple and AAPL will be fine.

    1
    January 28, 2021
  4. Jerry Doyle said:
    None of the information above in the WSJ analysis should have a deleterious effect on Apple’s fundamentals going forward. Apple has shown the ability to navigate these convoluted economic times dealing with the pandemic. In fact, it did so by having historic quarters. So, the fundamentals continue there for Apple. The problem is this herd mentality to bolt in a wild flight of fleeing by selling, but once investors and WS settle down they again will realize Apple is the investment to own. Stay long.

    1
    January 28, 2021
  5. Michael Goldfeder said:
    @Joseph Bland: Spot on! Options holders will make theirs this week. Then it starts to run up next week heading into the ex dividend date.

    0
    January 28, 2021

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