It may sound cliché, but Apple (AAPL) has long been the apple of the market’s eye. The largest company on the S&P 500 by market cap, it has long carried the market, rallying, even when the rest of the market traded sideways or even tanked. Apple is a market leader; when its suppliers change revenue and earnings forecast, the market listens – and that’s because the company commands such a dominant share in the smartphone market, and increasingly so, in app sales and its other tech offerings. That’s why, when Apple reported amazing numbers after closing, not only did the stock retain its gains from the regular session, but rallied even higher. No one nor any company can have everything go its way all the time but Apple, though shy of a perfect ten, came as close as you can get! AAPL rose 2.3% in regular trading, rallying over 3% after closing.
Here is just a snapshot of all the things that went Apple’s way.
- Apple ramped up its stock buyback clip in the last quarter to its highest rate ever. The company capitalized on the correction to grow EPS.
- The amount pumped into repurchased in Q1 2018 more than doubled the Q4 2017 amount; the company upped the amount $5 billion past its previous highest spending spree.
- Apple announced on Tuesday that it was adding $100 billion more to its share-repurchase authorization, the WSJ reporting that Apple would become the largest corporate dividend payer – on the heels of a 16% increase.
- Analysts are now set to increase their price target on the stock, which would likely fuel more stock growth.
- Apple’s earnings came out better than expected, despite disappointed iPhone revenue and shipment figures.
- Apple’s software and services segment saw sales grow 31% year-over-year to $9.19 billion, outstripping the $8.38 billion forecast.
- Apple had doubled software and services revenue over the last 4 years.
- Paid subscriptions to the App Store surged 100 million over the last year to 270 million.
- Revenues from Apple’s wearable products soared 38% for the quarter.
Apple CEO, Tim Cook summed up iPhone X sales figures as follows: “A team wins the Super Bowl, maybe you wanted them to win by a few more points, but it’s a Super Bowl winner,” adding, “I could not be more proud of it.” As for Apple Pay’s increased global use in countries like China and Japan, Cook commented, “This is just a huge opportunity for us and I feel very good about the track we are on. And as for the buybacks, the company’s CFO, Luca Maestri, commented, “Considering the unprecedented size of this new authorization, we want to be particularly thoughtful and flexible in our approach to repurchasing shares.” She underscored the desired timetable as well: “Our intention is to execute our program efficiently and at a fast pace.”
Market Summary: The Dow slipped 0.27%, making it its third consecutive losing day. The S&P 500 rose 0.25%, the NASDAQ tacking on 0.91%. Tech was clearly the day’s winner, with gains of 1.5%. Though six of the 11 sectors on the S&P 500 ended down, tech carried the whole index; the biggest losers on the S&P 500 were consumer staples, which tumbled 0.9%, energy slipping 0.6%.
As for market uncertainty, given Trump’s extension on steel and aluminum tariffs for allies, it’s hard to hedge your bets at present! The EU’s European Commission, weighing in on the matter, noted, “The U.S. decision prolongs market uncertainty, which is already affecting business decisions.” The frustration in the EU is marked, the commission likewise stating, “The EU should be fully and permanently exempted from these measures, as they cannot be justified on the grounds of national security.”
Economic Calendar: MBA Mortgage Applications will be released at 7:00. Then at 8:15, the ADP Employment Report will be released. Given the recent movement in oil and the fears stoked by the revelation of Israeli PM Bibi Netanyahu on Iran’s nuclear program, be sure to follow the EIA Petroleum Status Report at 10:30. Then at 14:00 the FOMC Meeting Announcement will be released. The Fed’s announcement could be of critical value, given the possibility that the Fed could change its rate timetable. Economists are not expecting the bank to lift rates, today, though. At the same time, the Fed announcement will be dissected for any and every hint, and especially given computerized algorithmic programs which respond to keywords – or turns of a phrase – expect volatility today, being sure to have your finger on the market’s pulse.
Wednesday’s Hot Stocks: MDLZ, SNAP, GILD, AAPL
Have a great trading day!