Premarket: Apple is green

apple premarket green 2-19From the wsj’s “U.S. Stock Futures Rise Ahead of Economic Data” posted early Friday:

U.S. stock futures edged up Friday ahead of fresh data on the services and manufacturing sectors that are expected to point to a robust economic recovery.

Futures tied to the S&P 500 ticked 0.2% higher, pointing to muted gains after the opening bell. The broad market index is down 0.5% for the week so far. Nasdaq-100 futures also added 0.2%.

Stocks have come under pressure in recent days as concerns about the pace of economic recovery, high valuations for technology stocks and rising bond yields weighed on sentiment. On Friday, investors will get to assess purchasing managers’ views on the outlook for both the services and manufacturing sectors at 9:45 a.m. ET.

“Investors are taking a little bit of a pause,” said Arthur van Slooten, global asset allocation strategist at Société Générale. “We believe there is further to go. When the reflation trade is back on and there’s more confidence about this, we’ll see a continuation of the market performance that we’ve had” in recent weeks, he added.

My take: Katy Huberty’s Friday note has good news for Apple. Coming up next.

9 Comments

  1. Jerry Doyle said:
    I still am confident that my $150 stock price will be met by the Q2 earnings call late April. The data on Apple’s exceptionally pandemic era performance is too good to continue to discount, or ignore. At some point WS will acknowledge that Apple is hitting all cylinders. I am looking forward to the spring’s introduction of new products. Then, as we move into the fall period and prepare for the 2021 Holiday Season we should be able to see more clearly that $200 target price by Q2 2022. Rumors around the forthcoming Apple car will gain greater clarity and investors’ enlightenment as to Apple’s ability to compete formidably in the profitable transportation sector should add strength to its growing stock price. This bull market run still has legs! There is so much liquidity flooding the global economies that it is similar to a tsunami pulling along all companies able to ride atop the powerful waves, and the Apple ship is one such company.

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    February 19, 2021
    • David Emery said:
      But the big question is what happens to markets when the Fed’s cash stops sloshing around… Based on the arguments I’ve read about that prospect (“when”, rather than “if”), Apple would seem to be a good investment for higher interest rates and/or more inflation.

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      February 19, 2021
      • Jerry Doyle said:
        @David Emery: I agree with your statement fully when it comes specifically to Apple as an investment during periods of high inflation and higher interest rates. Apple is a “cash rich” company and it is one of the best “tech” companies (with tech overall being a hedge against inflation & high interest rates). Those two combinations should serve Apple as an excellent investment hedge against inflation and higher interest rates.

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        February 19, 2021
  2. Jerry Doyle said:
    Continued…..

    Apple remains a growth stock paying a modest dividend. No growth similarly was occurring in those value stocks I mentioned above. In fact, on an IBM chat board I expressed my frustration that Ginni Rometty had not turned IBM around and that after six years as CEO (Arvind Krishna is current CEO) the stock price was less than it was when she arrived. IBM shareholders essentially attacked me on the chat board and defended Rometty. After several days puzzling over why IBM shareholders were not interested in stock price appreciation, I realized it was all about IBM’s great dividend & they did not want that dividend disturbed, perhaps through a change in CEO leadership. I came to the conclusion they owned tens of thousands shares that provided a handsome life style through high dividend payouts & stock price appreciation took a backseat. Their mindset was to let their inheritors deal with the lack of stock price appreciation while they enjoyed the comfort lifestyle of high dividends.

    Continue….

    2
    February 19, 2021
  3. Jerry Doyle said:
    Continued….

    I emulated your investment strategy of going all-in on Apple (selling my IBM shares along with all other high dividend stocks). This was early fall 2018. Subsequently the stock took a hit in Q2 2019 (as did most all stocks due to imposed tariffs), but a few months later Apple exploded in stock price appreciation. Apple’s stock growth never has looked back, although there has been short periods of abatement as one should expect.

    If I had stayed invested in those high paying dividend stocks, my portfolio today would pale alongside my existing Apple investment and, my tax billed the last two years significantly higher. While I never have cashed an Apple share, I take comfort in knowing that if the need arises I always can sell some shares. In summary, the “all-in” on Apple has rewarded me handsomely & reduced humongously, my tax bill.

    1
    February 19, 2021

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