Premarket: Apple is green

apple premarket green 6-11-21From the Wall Street Journal’s “Stock Futures Waver After S&P 500 Hits Record” posted early Friday:

The major indexes are hovering close to all-time highs, leaving investors looking for any catalysts that may propel the next leg in what has been a sharp rally since the March 2020 rout. Fresh spending plans by the Biden administration that could result in higher taxes, as well as stocks’ high valuations and the emergence of new Covid-19 variants, are making people more cautious. Money managers are also weighing whether the rise in inflation is likely to be transitory.

“We’re still positive on the outlook, but we’re not as optimistic as we were three months ago,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management. “The market needs to take a breather and let earnings catch up to where prices are.”

The Labor Department on Thursday said the U.S. economic rebound is driving the biggest surge in inflation in nearly 13 years, with consumer prices rising in May by 5% from a year ago. Investors have been concerned for some weeks that a sharp and sustained rise in inflation may prompt the Fed to weigh ending its easy money policies in coming quarters. More recently, the market’s inflation expectations have abated, but it remains a focus point for many people.

“Inflation clearly is the big risk out there,” said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald. “Some of the teeth have been softened over the last 24 hours, but there is still the risk that the Fed comes out and says maybe this is more sustained, and that changes the narrative, so central banks are still very much a thing to watch.”

My take: Still range-bound and sideways.

5 Comments

  1. Jonathan Haulenbeek said:
    The huge rotation from growth to the reopening trade (cyclical value) continues. This is purely technical and does not mute the favorable fundamentals for big tech in general, nor Apple in particular. In the end, stocks perform based on earnings, revenues, cash flow or a combination of all three and then some. Notwithstanding the potential headwinds for Apple from comps going forward, take heart Apple fans. Better days are coming, but it will require patience. “Good things come to those who wait.”

    7
    June 11, 2021
    • Kirk DeBernardi said:
      When all the talking heads simply try to get views, fill pages and achieve clicks, it’s nice to see such a calm and poised attitude about the true nature of AAPL’s ups, downs…AND the current sideways, from Apple 3.0 member Jonathan Haulenbeek.

      “My take: Still range-bound and sideways.”

      Observant and true but — oy vey…have we not been HERE before.

      All you longs — Patience…patience…patience.

      2
      June 11, 2021
  2. Rodney Avilla said:
    I am still of the opinion that if Apple had a higher dividend, we would have more value investors jumping onboard after the last two quarterly reports, and appl would be migrating upward at this time, instead of sideways. And again, I believe they could have increased dividends (ongoing, not a one time payout) without affecting stock buy back plans. Personally I don’t want the dividends (taxes), but I would enjoy the effect the greater demand for aapl would have on its price.

    1
    June 11, 2021
  3. Bart Yee said:
    Instead of the current $0.88 dividend and 0.70% yield, let’s say we increase it to $1.06 or 20.5% higher. That would drive the yield to 0.78% at current closing of 127.35. Let’s say that helps value investors bid up the price 10% to $140.08, wow big move and near ATH. But guess what, that $1.06/$140.06 lowers the yield (again) to 0.757%.

    So do “value” investors based on the (relatively low or “paltry”) dividend really move the stock? IMO, NO because how can they say Apple is a “value” at a PE ~29, and any rise in price raises the PE and any blowout quarter brings it back down to the 25-27 range and yo-go’s like this till Apple’s next breakthroughs?

    0
    June 11, 2021

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