Premarket: Apple is red

From the Wall Street Journal’s “Stock Futures, Oil Drop on Omicron Vaccine Concerns” posted early Tuesday:

U.S. stock futures fell and investors sheltered in government bonds after drugmakers raised concerns that Covid-19 vaccines won’t work as well against the new Omicron strain…

Investors are trying to parse the risk posed by the new strain. Drugmakers have raised concerns that existing vaccines might be less potent against Omicron, but a lack of concrete information so far is driving uncertainty, and with it, volatility in stock markets.

“Markets are kind of in a holding pattern where no one knows if this is going to be a problem or not,” said Mike Bell, a strategist at J.P. Morgan Asset Management. “Until we have evidence either way on whether the existing vaccines still work against Omicron it doesn’t make sense to make a big bet in either direction.

Charts: Yahoo!Finance sees a bearish relative strength index (RSI) pattern. As of 6:00 a.m., max pain was still at $157.50 with a mountain of calls at $160.

40 Comments

  1. Jerry Doyle said:
    There is much uncertainty about definitive data relative to the Omicron variant and much visual evidence to suggest world-wide markets are overreacting.

    Moderna’s CEO spoke inappropriately when he alarmed everyone last evening that the current crop of vaccines will struggle with the Omicron variant.

    Concomitantly, Pfizer’s CEO says boosters, even if they are not as effective as against Delta, should reduce Omnicron’s threat dramatically.

    Meanwhile, individuals who have succumb to the Omicron variant report only “mild” symptoms.

    A JPM team led by Dubravko Lakos-Bujas, chief U.S. equity strategist, “…. sees further stock upside ahead, albeit more moderate, on better-than-expected earnings growth, easing supply shocks, improved background on China (which JPM upgraded to overweight on expectations for policy easing and as equity risk premiums from regulatory moves are priced in) and emerging markets, normalizing consumer spending habits and, most important, accommodative central banks.” That team also offered upbeat outlook over recent market stress saying, “…. While there have been sporadic setbacks with COVID-19 variants (e.g. delta, omicron), this needs to be seen in the context of higher natural and vaccine-acquired immunity, significantly lower mortality, and new antiviral treatments.”

    The message that needs to be broadcasted is the one by the CDC saying Omicron is “…. all the more reason for all vaccinated adult to get a booster dose because the CDC director says, ‘strong immunity will likely prevent serious illness.’”

    In summary, there is too little about the Omnicron variant that is known and what “is” known tells us there is a continuing effort by the markets to overreact in the face of mounting evidence that says otherwise.

    2
    November 30, 2021
    • Robert Paul Leitao said:
      Jerry: Any new thoughts following the market’s close? Apple moved up, the broad market moved down. In your view, what was the primary cause of the market’s retreat today? The Fed, the virus, both?

      0
      November 30, 2021
      • Jerry Doyle said:
        @Robert Paul Leitao: “…. Apple moved up, the broad market moved down. In your view, what was the primary cause of the market’s retreat today? The Fed, the virus, both?”

        It was a double whammy, brother Robert Paul. Fears over the new Covid variant, omicron still were being digested, truly unsettling the markets. The markets, though, appeared to be converting the ominous news into an absorbable form of masticating it when Chair Powell “oddly” decided to break another monumental piece of unsettling news thrown at the markets on speeding up the bond-buying taper at its meeting this coming month. It was about as close to a 1-2 boxing punch as anyone can sustain and still be left standing. Guess what, though? The markets did not collapse. The markets remained standing like Rocky, still hanging on by the time the bell rung at 3:00 pm. CST

        The markets will have added time over the night to digest both events that occurred today. After doing so, I truly believe the markets will continue its annual Santa Claus rally. The economy is strong. The fact the Fed Chief said he sees reducing more quickly the pace of monthly bond purchases is because the strength of the economy is enhancing inflationary pressures. Essentially, what the good Chairman is saying is that the strength of the economy is taking precedence over worries about the Omicron variant. That is not to mitigate the importance of the variant as much as to acknowledge that we have a powerful economy that seems now to be growing close to a 7% rate. I suspect the markets will dive deep tomorrow into the PMI, ISM and October’s construction spending; all set to be released in the morning. Additionally, the ADP’s private payroll data report will be out tomorrow morning at 8:15 a.m.

        My thoughts on it all brother Robert Paul: It only gets better 🙂 Laissez le bon temps rouler! 

        Geaux 

        1
        November 30, 2021
    • Gregg Thurman said:
      As Asian exchanges commence trading for DEC 1 (12:06 AM Eastern) the DOW is up $140, the S&P is up $40 and the Nasdaq is up $271.

      It appears tomorrow will see more gains for AAPL, with gains being spread around more democratically.

      1
      December 1, 2021
  2. Gregg Thurman said:
    It’s all in how the author “interprets” what was said.

    Current vaccines ARE effective, just not as effective as against prior variants.

    That is to be expected as variants attack in new ways, if they didn’t they wouldn’t be variants. The point is, had current vaccines been available in March 2020 and the threat was Omicron, we would have had far fewer infections and deaths than we did.

    2
    November 30, 2021
  3. Bart Yee said:
    Well, the first hour had shown strong interest and positive trading in AAPL today to the tune of $4+, erasing the Friday Omicron downdraft. Obviously the day is still very young and the rest of the market is trending to decidedly negative and has pulled AAPL downward over the last 30 minutes.

    So the market is still reactive to the Omicron news and traders are trying to figure out / guess where the world is heading over the next few days to weeks.

    0
    November 30, 2021
  4. Gregg Thurman said:
    I don’t think Omicron is an issue. It is a media exaggerated tale of woe.

    WS, the big boys have studied the data (sans media sensationalism) and decided Omicron will be a non-event. You can see it with a price/volume overlay: WS came in with guns blazing for the first hour (it’s usual trade time frame), then having got its fill abandoned the marketplace to the profit takers. The slower reacting retail sector will finish the session looking for perceived bargains, but they two days late and were on the wrong side of the selloff.

    0
    November 30, 2021
  5. Jerry Doyle said:
    Here around noon there is a “sea of red” (literally) across the ticker tape except for one equity, a very bright and shiny “green” Apple. That speaks volumes! Apple was heading for a $5.00 pop until Chairman Powell’s gave his little talk on wrapping up tapering bond purchases sooner than later. No matter, the trajectory for Apple’s ascension lies ahead in the coming day, weeks and months.

    Laissez le bon temps rouler 
    Geaux 

    0
    November 30, 2021
  6. Robert Paul Leitao said:
    Any excuse will do at this time to move prices lower. The DJIA is down over 600 points so far today. The S&P 500 and Nasdaq are marching in step. I won’t be buying today and maybe not tomorrow. I’ll wait for the sell-off to settle before scavenging through the debris for bargains.

    0
    November 30, 2021
  7. Robert Stack said:
    Wow – quite a strong close for AAPL today!

    1
    November 30, 2021
    • Robert Paul Leitao said:
      Robert: I just read a report from Barron’s penned by Eric Savitz, one of our Apple 3.0 AMA special event guests, Cowen is citing strong iPhone 13 demand in China. Not to be left out of the mix, Dan Ives at Wedbush (also an AMA special event guest), said domestic iPhone demand over the Thanksgiving holiday appears to have been “robust.”

      0
      November 30, 2021
      • Robert Stack said:
        I added to Apple sales too, but just a little, by buying a 4pk of AirTags over the weekend. For only $99, minus a $25 Apple gift card, made this a no-brainer purchase.

        2
        November 30, 2021
        • Bob Goldstein said:
          I just bought a second four-pack set. My son has very expensive mountain bikes so he wanted two more and I decided that it would be cheap theft insurance if my wife and I had them in our cars. I was a day late for the gift card

          0
          November 30, 2021
  8. Michael Goldfeder said:
    I have started keeping a non scientific record of the volume in Apple the last 15 minutes of each trading day. Generally, there is a 8-10 million share bump in the last 15 minutes. Today I was late and noted the volume of 128.5 million shares at 12:53 p.m. But the final jump in this last 7 minutes was extraordinary to a bit over 161 million shares. Impressive.

    Looks like Mr. Market is taking note of Apple after all of these months of lower than reasonable pricing. So now the Apple 3.0 subscribers who are the historic longs, especially Jerry Doyle and Joseph Bland, are being rewarded for their conviction.

    2
    November 30, 2021
    • Robert Paul Leitao said:
      Michael: What’s your view on why Street analysts for the most part are being tepid on their AAPL price targets?

      0
      November 30, 2021
      • Bart Yee said:
        I have no comment on analysts’s reasons for being “tepid” on price targets but today’s AAPL run of $5.06 to close at $165.30 is a new all time closing high and current positive after hours trading would put it over the ATH of $165.70.

        Today’s close puts 4 more analysts underwater (including Katy Hubert) and we should see a post from PED very soon to that point. I’ll refer back to the last underwater post from Nov. 19, 2021 for the chart:

        https://www.ped30.com/2021/11/19/apple-analysts-underwater-160-55/

        0
        November 30, 2021
      • David Emery said:
        The other thing is that ANALysts know “no one looks further back than the last quarter.” So there’s no consequence for being -consistently wrong- over time.

        0
        November 30, 2021
  9. Michael Goldfeder said:
    @ Robert: My personal thought is they don’t want to be construed as an Apple cheerleader if they’re too positive. Which is why you have to tip your hat to Dan Ives who boldly states what everyone on this site sees quite clearly.

    But it’s okay because now Dan looks like Nostradamus compared to the “tepid” crowd.

    2
    November 30, 2021
    • Robert Paul Leitao said:
      @Michael: Thank you. I believe analysts are also cautious due to a lack of definitive guidance from management. I’m not faulting management. It’s more work to substantiate a position absent more definitive information as a benchmark. That’s apparently not a problem for Dan Ives and Katie Huberty. It may be for most analysts covering the company.

      0
      November 30, 2021
      • Gregg Thurman said:
        I believe analysts are also cautious due to a lack of definitive guidance from management.

        I believe WS, like me, price targets are based 95% on management’s guidance. Nobody is better at forecasting Apple’s performance than Apple management. You just have to know the formula by which they give the Company some wiggle room.

        Since Luca became CFO, management’s has proved quite accurate after applying what I believe is it’s wiggle room factor. Since March 2020, without guidance, my estimates haven’t been anywhere near as good.

        0
        November 30, 2021
  10. Bart Yee said:
    Nice close to a new all time closing high of $165.30. IMO rotation or profit taking out of other equities with larger gains or slowdown risks put a lot of cash out there today. Obviously with larger volumes all day, there’s plenty of big and small players “believing” that even at this level, AAPL is undervalued. Given that Apple could only buy back a small portion (<10%) of today’s volume, plenty of other investors buying today.

    0
    November 30, 2021
    • Robert Paul Leitao said:
      Bart: A TINA rally into the close for Apple?

      0
      November 30, 2021
  11. Bart Yee said:
    The Nov 30 close puts 4 more analysts underwater (including Katy Hubert) and we should see a post from PED very soon to that point. Please refer back to the last who’s underwater post from Nov. 19, 2021 for the chart.

    0
    December 1, 2021

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