Premarket: Apple is green

apple premarket green 10-4-22From 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.

apple premarket green 10-4-22

24 Comments

  1. Bart Yee said:
    AAPL ended up $3.65 at $146.10 with an upward trend in the last 45 minutes. Volume was just below average. AAPL has now recovered a large part of last Thursday’s loss after the Bloomberg report.

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    October 4, 2022
    • S Lawton said:
      Yes AAPL has made great strides in reducing its 8% deficit last week but, while the major tech stocks performed over 3%, AAPL didn’t hit the DOW performance.

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      October 4, 2022
      • Robert Paul Leitao said:
        S. Lawton: What are your expectations for Apple’s near-term performance?

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        October 4, 2022
        • S Lawton said:
          Good question. Right now and until earnings, I think it will be at the mercy of Apple news whether true or rumors. Speaking of rumors, there is one suggesting there will be no October event. Instead it will be covered by press release.

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          October 4, 2022
    • Robert Paul Leitao said:
      Bart: Do you see the last two days of trading as a bear market rally or the start of the market turning higher?

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      October 4, 2022
      • Bart Yee said:
        “Do you see the last two days of trading as a bear market rally or the start of the market turning higher?”

        “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.

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        October 5, 2022
        • Robert Paul Leitao said:
          Bart: Thank you for the thoughtful response. On Monday and Tuesday I think the market got ahead of itself on expectations the Fed will begin to moderate increases in the Fed Funds rate. While the odds now favor an economic downturn in 2023, the market will anticipate the recovery long before a downturn is over. I have few concerns about Apple looking a year out from now outside of any unexpected hiccups in organic revenue and net income growth.

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          October 5, 2022
  2. Aaron Belich said:
    Dead cat bounce.

    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.

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    October 4, 2022
    • Robert Paul Leitao said:
      Aaron: Do you have a forecast date as to when Apple will reveal the much-anticipated AR product?

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      October 4, 2022
      • Aaron Belich said:
        @Robert I have no idea, I’m reading/watching the same as everyone else.

        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.

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        October 4, 2022
        • Robert Paul Leitao said:
          Aaron: Thank you for the response. What are you expecting at an Apple October event? Considering the challenging macro economic environment with central banks around the world raising interest rates to stamp down inflation, do you think strong September quarter results can move the share price appreciably higher? I’m looking long-term – three years to five years out.

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          October 5, 2022
          • Bart Yee said:
            I personally do not think this is the time to introduce any new AR products now, there are too many negatives to consumer demand for a new high priced device to compete for discretionary dollars. The other reason is there has not been articulated the killer Apps and use cases for AR AND this would provide more time for Apple to get BOM prices lower over time.

            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.

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            October 5, 2022

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