Inflation report takes the air out of Apple, markets

apple inflation kicks marketsFrom CNBC's "Dow futures drop 500 points after hot inflation report" posted early Tuesday:

Stock futures dropped on Tuesday morning after an August inflation report came in hotter than expected.

Dow Jones Industrial Average futures sank 525 points, or about 1.6%. S&P 500 futures fell more than 2% and Nasdaq 100 futures slid 2.7%.

The August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, even with falling gas prices. Core inflation rose 0.6% month over month.

Economists surveyed by Dow Jones had been expecting a decline of 0.1% for overall inflation, with a rise of 0.3% for core inflation...

"The fact the SPX has rallied so much in the last few days will make the index especially vulnerable to a downdraft. The fact the sources of inflation were so widespread is another negative (it's hard to pin the upside on any one category)," said Adam Crisafulli, founder of Vital Knowledge.

My take: This too will pass.

9 Comments

  1. David Emery said:
    “My take: This too will pass.”
    Mebbe like a kidney stone, though, with a lot of pain… 🙁

    3
    September 13, 2022
  2. Bart Yee said:
    Trying to dunk the beach ball again. But the Apple consumers have already been dealing with these inflationary pressures (the report is a lagging indicator) and they made decisions to preorder anyway.

    I agree the risk for Apple is if demand has weak legs and falters before Christmas or end of year.

    1
    September 13, 2022
  3. Fred Stein said:
    We can easily pop balloons, but Apple, the beachball, is much tougher.

    Apple’s innovations and earnings growth ultimately prevail regardless of how easy or hard it is to tackle inflation.

    1
    September 13, 2022
  4. Brian Loftus said:
    I like the sling shot analogy better – it shoots higher after being pressed down.

    1
    September 13, 2022
  5. Jerry Doyle said:
    I cringed weeks ago when rumors floated that Apple planned a $100 hike in the iPhone 14 line-up. I wrote here of my trepidation and suggested that such temptation should be tempered. Sure enough, Apple found a way to circumvent increasing the iPhone price even more than imaginable resulting in a consumer perception that the phones were a bargain to be had now instead of waiting for a most certainly phone price increase in the iPhone 15. Apple is brilliant in the way it runs its business and forgoing that price increase in the 14 was a splendid business strategy. Meanwhile, this administration has a planned event scheduled later today in the White House to celebrate the Inflation Reduction Act while inflation remains at 8.3 percent.

    5
    September 13, 2022
  6. Gregg Thurman said:
    The most effective action the US can do to reverse inflationary pressures is to speed up and improve the type of weapons being shipped to Ukraine.

    A Russian defeat in Ukraine will result in Putin’s “retirement” from public service leading energy and food stuffs price normalcy.

    4
    September 13, 2022
    • David Emery said:
      I agree that US/NATO/’free world’ needs to continue to invest in Ukraine’s defense, and we need to be there for the long run. I also agree that Putin’s “retirement” would be the best thing. BUT I don’t believe that we can bring about regime change in Russia even with Ukrainian military success. And in the near term, Ukrainian successes brings risks of Russian escalation.

      4
      September 13, 2022
  7. Gregg Thurman said:
    There is always opposition to a despot’s rule, it just doesn’t manifest itself when things are going well. When they’re not, that’s another matter all together.

    Should Russia lose in Ukraine, as I believe it will, whether conventional or nuclear, it would be suicidal to believe that escalating the conflict would be to Russia’s benefit. At that time opposition to Putin would escalate to a breaking point (for him).

    After all, the war then would not be against Ukrainians using NATO weapons, it would be against NATO weapons AND forces (including Air Forces).

    1
    September 13, 2022

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