Premarket: Apple is red

From the Wall Street Journal's "Tech Stocks Poised to Decline as Bond Yields Rise" posted early Monday:

U.S. stock futures dropped Monday and a selloff in U.S. government bonds extended into its sixth week after progress toward a new fiscal stimulus bill brightened economic prospects and sapped demand for technology stocks...

President Biden’s $1.9 trillion Covid-19 relief plan was approved in the Senate over the weekend, and faces a vote in the House as early as Tuesday. The additional fiscal spending is expected to bolster the pace of economic recovery and boost inflation. As the outlook brightens, money managers are moving out of government bonds and technology stocks, and into sectors such as banks and energy that are likely to rebound with the economy.

“Stimulus checks into people’s bank accounts will be a big propeller of growth, given the consumer in the U.S. makes up such a big part of U.S. growth,” said Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management. “The underlying strength of the U.S. economy, growing expectations that the stimulus gets fully passed, plus inflation expectations rising because of oil: these are all likely to continue to push bond yields higher.”

Tech stocks have been retreating in recent weeks as vaccination programs advance and economic data point to the recovery being under way. The Nasdaq Composite Index declined over 2% last week, losing ground for a third consecutive week. That is because investors are betting that the largest media, communications and online-shopping companies will see a slower pace of growth as pandemic lockdowns end.

My take: Good time for Apple to be hoovering up its own shares.

9 Comments

  1. bas flik said:
    i have already read millions of letters in search for a better stock than AAPL. All in vain. i want to diversify but not in worser stocks. in the oceans of printed money and cheating gouverments you need the best ship with the best captain.

    5
    March 8, 2021
    • Robert Stack said:
      @bas: I fully agree with you. And like many others, I also appreciate the European perspective you bring to this community.

      2
      March 8, 2021
  2. Bart Yee said:
    With AAPL shares floating in and around $120 +/- $3 now, Apple would do well to buyback millions of shares at this price, having done exactly that in Q1 by buying back 200M shares at $120/sh avg, using $24B with over $38.8B FCF. Q2 2020 they spent $18.5B in share repurchases, could easily see $18-22B spent this quarter if prices remain in low $120’s through March for an overall quarterly average of ~$125 and 144M to 176M shares or more repurchased.

    2
    March 8, 2021
  3. Rodney Avilla said:
    I have some money coming in this week that I want to park in stocks for about 6 months. With this drop in price it’s making that decision much easier, although I don’t like what it’s doing for my 401k overall.

    0
    March 8, 2021
  4. Thomas Larkin said:
    Are Tony S’s and Rod H’s employers buying? Telling their clients to buy? Fun with Options plays? Stealing lunch money from the new kids on the playground?

    0
    March 8, 2021
  5. « Rotating out of tech. » At least in the case of Apple, sort of like jumping out of a state-of-the-art surface-effect vessel to board many questionable dinghies. Consumer purchasing, eating out, travel and energy will return but not exactly rebound. Money will flow back to profitability, including tech firms positioned for success. Stocks like XOM, CCL or UAL may require extensive patience.

    1
    March 8, 2021
  6. Steven Philips said:
    I just wish that every time MSM means Google, Facebook and Amazon they wouldn’t say “Big Tech.”
    Somehow they need to exclude Apple from that group!

    0
    March 8, 2021
  7. Apple is a consumer products powerhouse that just happens to entertain and design chips and do all the other cool things Jobs insisted it achieve. Dude was supremely cool
    when it comes to the future. Wish Steve were here to enjoy this situ.

    0
    March 8, 2021
  8. Tommo_UK said:
    $116 … time to start nimbly stepping into the playground again after getting out around 25% higher and buy on the way down to accumulate.
    Been biding my time and now mulling it over.

    0
    March 8, 2021

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