From Kriti Gupta’s “Apple Is Plunging and a Weaker Dollar May Be the Savior It Needs” posted midmorning Monday on the Bloomberg:
Apple Inc. just suffered its worst week since last February and is down again Monday. What can reverse this trend? If history is any guide, look for a weaker dollar.
The tech giant hit a $3 trillion market capitalization on Jan. 3. Since then, the stock has lost 13%, while the S&P 500 has lost 11% with mega-cap tech shares taking a beating. The correlation isn’t new. Each time Apple’s market value has hit a trillion-dollar milestone, the broad market gauge has entered a technical correction. And a dollar slump has been the key to turning it around.
When Apple first reached a market cap of $1 trillion in August 2018, it sparked a 20% technical correction in the S&P 500. It happened again two years later, as it breached the $2 trillion milestone and then helped fuel the tech wreck of 2020. Obviously, other factors have played a role, like Federal Reserve decisions and macro economic developments. But there is no mistaking Apple’s role as a stock-market bellwether…
The point being, keep an eye on the dollar. As it weakens and gives foreign investors more incentive, the S&P 500 is likely to reverse the selling that has thus far marked 2022. And history says big tech, including Apple, will play a significant role in that.
My take: Apple doesn’t need saving. The stock will take care of itself.
Apple Inc. is doing just fine.
$AAPL and Apple Inc. are not joined at the hip, never were. Apple Inc. has spent the better part of it’s existence dragging $AAPL to some semblance of reality since the rest of the institutional investors have used and abused it.
“I’m thinking long-term.”
Good decision!
Oh. Never mind.
Today’s dramatic fall and turn around seems to be the crowds heading for the exits while the patient investors spy a buying opportunity. Hard to time that move unless you are a real short term trader! Sell in the morning buy in the afternoon. I wouldn’t be surprised if this kind of action unfortunately lasts little longer. I often feel like Tuesday falls and Wednesday rebounds do feel more reliable. Just a feeling not backed by research.
Do these journalists really not understand that correlation is not causation? Or do they callously exploit naive readers who hope to gain some key insight for trading advantage?
Either way, it’s a sad reflection on the the field of journalism. As Gregg has pointed out, even the venerable news outlets have abandoned quality.
Make no mistake: We’re still solidly in a gambler’s market, so caveat emptor. Which is latin for “If you’re smart you’ll buy and hold AAPL”….