From Barron's "Stocks Continue Rallying to Start October" posted early Tuesday:
The momentum from a rally on Monday continued into Tuesday, with stocks rising into the start of October and the final quarter of 2022 as bond yields and the strong U.S. dollar eased back...
Investors are emerging from a brutal month for stocks—the S&P 500’s worst September since 2002—and indeed a brutal third quarter. A selloff in recent months has been driven by fears around central banks like the Federal Reserve tightening financial conditions in a bid to combat red-hot inflation, dampening demand for risk-sensitive assets and raising the risk of recession.
But investors are now enjoying a relief rally, driven in part by weak manufacturing data Monday that could be an indication that the Fed will soon slow down its pace of interest rates and take some of the pressure on the economy.
“Indeed, the S&P 500 bounced back from its 22-month low alongside a sharp decline in global sovereign bond yields,” said Jim Reid, a strategist at Deutsche Bank. “There were multiple factors driving the rally, but the main one was growing speculation that central banks could soon pivot towards a more dovish stance, particularly after the market turmoil over the last couple of weeks.”
Charts: Yahoo!Finance still sees bearish momentum. Max pain stays at $145 with the same call mountain at $160 and put peak at $135.
“Do you see the last two days of trading as a bear market rally or the start of the market turning higher?”
A series of bogus stories promulgated a massive move of AAPL just in time for end of the month options expiration. I’m sure that’s just a coincidence. /s
That it also tended to decrease investor confidence in AAPL as a stable stock is just collateral damage. Nothing personal, I’m sure. /s
What the broader market does, IMHO, will determine what happens to Apple, at least up until earnings. I have very little confidence in the broader market gaining much of a foothold here. Most investors won’t appreciate that the latest dunking of the AAPL beachball was bogus, which will decrease overall investor confidence in AAPL.
Fortunately, at the end of the month, Apple will likely surprise with good earnings, which will, once again, be pooh-poohed. That would normally set up another AAPL dunking attempt, probably just before the election. However, Apple, as I said earlier, still has another shoe to drop (i.e., product reveal), which I think will tend to protect AAPL valuation. If they drop that shoe before the election, there’s a good chance that will precipitate a more permanent bull market turnaround going into next year.
“Ah, the crystal ball, she is somewhat cloudy” SWAG, I think there will be some slow choppy movement higher for AAPL and by extension, any indexes which Apple is part of. This will work towards earnings on October 27. There may be dips with any negative economic, Russian War, or further news. I expect a trading range between $137-$157, maybe $160. Selling pressure from RMDs, year end expenses and maybe tax harvesting will keep a lid or ceiling on maximum price gains.
Now when and what Apple reports for Q4 earnings AND Q1 guidance will determine the rest of this quarter’s trajectory, at least from Apple’s business side. IMO, as long as Apple and the market feel Apple’s fundamentals are reasonable, there will be support price wise long term. There will be many to paint whatever is said in a negative light so sentiment is fragile until inflationary pressures are reduced to the Fed’s satisfaction. An October event and persistent positive demand would be good news.
But if Apple misses or guides negatively, the market will not be kind, and the indexes concurrently will suffer. No matter what, we will repeat this cycle of thought again in early to mid Q2 2023 as Q1 earnings come into play and the Russian-Ukrainian war drags to a 1 year period. Of course, any major escalation like tactical nuclear weapons use would be a black swan event for financial markets and a huge external monkey wrench. Same with any worsening or deadliness of Covid.
IMO the broader market can pull down AAPL or Vice-versa, but AAPL may rise faster than the overall market.
Perhaps you haven’t noticed just how far other stocks (like Microsoft and Amazon) have to go just to catch up to where they were, relative to Apple, in the middle of December, 2021….
On 11/15/2021, AMZN hit an ATH of $188.11. It’s high today is $123 even. That’s a 35% difference.
On 1/6/2022, AAPL hit an ATH of $182.94. It’s high today is $146.10. That’s a 20% difference.
To boot, AMZN hit a peak of $177.61 on September 2nd, 2020. That’s 2 years now of almost flat peak price.
On September 1st, 2020, AAPL hit a peak of $134.80. That’s a 35% increase in peak price between then and AAPL’s 1/6/22 peak.
I still think WS and the annual FUD will push things lower till the end of October. Then we’ll see if WS wants to rip and tear upwards post earnings and whatever fun is unveiled during the October event.
While this is the best time to launch, poor economics for the masses, low volume expectations (for Apple—lol), but for Gen 1, who cares!? Get it into Apple’s best customer’s hands and see what needs to be iterated upon until the masses are in a position to jump in 3-4 years down the road, in reference to the release of iPods and iPhone.
I still don’t know that Apple has the processing power and battery life to support whatever the glasses are going to become. Though perhaps the Ultra Watch and iPhone 14 Plus are the big batteries to set the baseline for devices that the glasses will be tethered to. So perhaps in the next 24 months (WAG), in line with other’s WAGs.
If there will be an October event or press releases, should happen within the next two weeks to provide for ordering and delivery in time for Christmas.
“I personally do not think this is the time to introduce any new AR products now…”
I don’t agree. Any product Apple introduces will be snapped up from the get-go. And it will, as always, take time for Apple to ramp up production.
If they’ve got it, I think it would be a big mistake to just sit on it.