Displaying items by tag: Apple

(San Francisco)

The CME Group has published a piece about the outlook for FAAMG stocks in the context of the underlying economy. The CME notes that the FAAMG stocks now account for 22% of the total S&P 500, so their influence is skewing investors’ view of the underlying economy. The reality is that the S&P 500 minus those five stocks is a much more accurate—and much bleaker—representation of the economy. CME says that as the reality of a slow recovery starts to play out in the market’s consciousness, there is bound to be a correction in FAAMG stocks.

FINSUM: The law of gravity would seem to dictate that a fall in FAAMG is inevitable, but what is the catalyst for such a move? Their earnings are good as is growth momentum.

(San Francisco)

Even the most die-hard Apple investor must be feeling a little woozy right now. The company’s market cap just surpassed $2 tn. And guess what—half of that came in the last five months. Yes, the company doubled in value since the start of the pandemic and is now worth $2 tn! A couple months ago many were saying Apple was a bargain, now it seems to have a very significant premium. So the big question for investors—is it time to cash out because things feel very toppy, or do you stick with it? The company’s earnings have been phenomenal. So good in fact that Goldman made a blunt comment about flubbing its forecasts, saying “It turns out that we and consensus weren't even in the ballpark in terms of what was possible.”

FINSUM: $2 tn is a scary number, but it feels like it would be wise to stick with Apple right now. Momentum is good and there does not seem to be a big headwind that would wound the stock.

(San Francisco)

Large cap tech has been doing great and getting tons of media attention. Within the big rise, though, Apple has seen relatively less attention. The reality is that it may be time to buy. Historical studies have shown that the best time to buy Apple stock is in advance of new iPhone releases, and it is now confirmed that a new iPhone is coming soon. And it is not just any iPhone, it is Apple’s first 5G iPhone, which the company said on a recent earnings call would start shipping in October.

FINSUM: Research has shown that the 90-day period preceding the launch of a new phone is an ideal time to buy. Seems like a good opportunity to consider Apple.

(San Francisco)

No matter how good you may feel about stock indexes being back near all-time highs, one fact cannot be ignored: the market seems to be heavily overweight on the five largest tech stocks— Microsoft, Facebook, Google, Apple, and Amazon (the new acronym, named by Goldman is FAAMG). These stocks have been powering the market, but the whole situation feels like past peaks where their outperformance could not go on forever. Concentration in the S&P 500 is now at its highest in decades, with those five names accounting for 22% of the total capitalization, up from just 16% a year ago. According to Barron’s “Simple arithmetic limits the continued outperformance of the biggest names, the Goldman team observes, because many portfolio managers have 5% limits on holdings of any given stock. The strategists’ analysis shows that the average large-cap mutual fund already has a 5% position in Microsoft and about 4% positions in the other big four names.”.

FINSUM: It seems these stocks are reaching their institutional allocation limits, which mans retail needs to power them higher. The whole situation feels ripe for a correction.

(San Francisco)

Apple just debuted a new phone model and they appear to have made a very wise decision. The company unveiled its new version of the iPhone SE, its lowest end model of the iPhone, for just $399, the same price as the original SE model in 2016. However, this phone is significantly beefed up, and Apple says its Bionic Chip is the “fastest chip in a smartphone”. The pricing, of course, comes at a time of major economic hardship for most Americans.

FINSUM: This is a wise play both from a revenue generation standpoint and a branding standpoint. It would be hard for most of the US to justify a $1,000+ upgrade right now.