A one-two punch that didn’t land. UPDATE: The Bloomberg punch has landed.
From Debby Wu, Takashi Mochizuki and Giles Turner’s “Apple Tells Suppliers IPhone Demand Has Slowed as Holidays Near” posted Wednesday evening at 9 p.m.
Apple Inc., suffering from a global supply crunch, is now confronting a different problem: slowing demand. The company has told its component suppliers that demand for the iPhone 13 lineup has weakened, people familiar with the matter said, signaling that some consumers have decided against trying to get the hard-to-find item.
Already, Apple had cut its iPhone 13 production goal for this year by as many as 10 million units, down from a target of 90 million, because of a lack of parts, Bloomberg News reported. But the hope was to make up much of that shortfall next year — when supply is expected to improve. The company is now informing its vendors that those orders may not materialize, according to the people, who asked not to be identified because the discussions are private.
From Mark Canfield’s “Tech Bears Being Burned Before Cautious Despite Apple Warning” posted Wednesday evening:
There has been a bit of head scratching among tech investors in Asia at the limited reaction to Apple’s warning about falling iPhone demand. Nasdaq futures and the shares of some Apple suppliers are subdued after the report. That could be because traders don’t want to be burned again by selling too early.
My take: The short squeeze during the last two week’s run-up must have been intense.
UPDATE: The punch landed…
Gruber might call BS cause ya know it’s Bloomberg.
Every single high flying December quarter is followed by the lower altitude March quarter (average ~25% decline from December results). When Apple calls in orders it is refining previously estimated numbers to more closely match anticipated demand. The question is: did Apple cut 25% off Decembers order, or did it cut 10% (because of overflow demand).
It’s all in how the info (generously assuming it’s real) is interpreted. Bloomberg, by design, is interpreting it as a man bites dog story. Dog bites man just isn’t “newsworthy”.
These stories always show up just like after Epic got slammed in a Federal Courtroom losing 9 out of 10 on their causes of action, it was hailed in the media as a win. Yet Epic appealed. More meritless nonsense that negatively impacted the stock.
Your misunderstanding of options is showing.
Bullish options positions got hit just as long shareholders got hit. For options traders the pain is most significant with shorter dated expiries ie., DEC 3 vs JAN 7.
Bearish options positions are benefiting from this spurious report, as are short sellers of shares.
For every open options contract there is an equal number of buyers and sellers, Bulls and Bears.
To state categorically the Bloomberg report is meant to benefit options players is categorically….wrong.
So, you are saying brother Gregg that these options players and short sellers participation in the markets have no effect on stock price fluctuations, and that the publishing of certain news items like this Bloomberg report serves no good for the ones who planted it? OK.
Two separate and not equal issues. SOME options players (half) will benefit, the other half does not. Your question takes us to the question of which came first: the chicken, or the egg?
Stocks came first as a means to provide physical evidence of ownership among many owners. Options came afterwards as a means to take defensive positions for those stocks. Options by design REACT to movements of the underlying stock, they do not push the stock except as an indicator of investor sentiment. So called Call Walls are that point at which investors believe the stock will rise, PLUS the premium they paid for the option (break even) and still make a profit. The limiting factor in “Call Walls” is the group consensus on how high the stock will go.
Where is the “Call Wall” for January expiry?
$150 Strike + premium $16.60 = BE $166.60 Op Int 112,600
$160 Strike + premium $9.50 = BE $169.50 Op Int 77,100
$180 Strike + premium $1.78 = BE $181.78 Op Int 72,700
Using the simplistic logic expressed many times on this forum the “Wall” is the $150 Strike. But the “Wall” has been migrating higher as Investor Sentiment has increased. Did it increase/decrease because of an article on Bloomberg. Christ no.
Bloomberg, and all other media, publish for the here and now, hence news cycles of no more than 3 days depending on the importance of the subject. It is incumbent on the media to milk a subject for as long as possible in order to keep its readers engaged. Writing articles about other articles is a cheap trick to accomplish that objective. Another cheap trick is to attribute the source for an article to an unnamed “source”, whose identity, by law, can’t be divulged.
Who benefits from the many spurious articles about Apple product plans, production intentions, etc. THE MEDIA!
The markets abhor unpredictability, it destroys all of its models. The markets would rather their models played out without the wild musings of an imaginative “journalist” whose only motive is profit generating hits from uninformed (and mostly ignorant) readers.
Bloomberg is shilling hogwash in a desperate ploy to gather clicks. If Apple has a demand problem why bother seeking exemptions for Trump tariffs? Those tariffs are essentially US govt taxes on US imports that China does not pay, Apple must pay them.
Pretty simple litmus test.
Apple wouldn’t “tell” their suppliers of the “weakness” of their sales. Period.
Very, very fortunately, this happened when Apple is still in the market to both take advantage of cheap buybacks and support the stock.
And, as always, you are wrong. How many times, in just the last week or three, have we seen regular session trading contradict premarket trading? Just enough to prove your thesis false.
Has to be the easiest job in the world. Apple never comments about anything. ;} Maybe they learn to say “No comment.” with a certain bit of a sneer?
I have an idea…Apple needs to have one of their talented graphics designers come up with a cute/clever new emoji that effectively conveys “No Comment”.
And then anytime one of their PR folks gets asked a stupid question about a stupid story, simply issue an Apple PR with the emoji on it.