The economic calendar features the Mortgage Bankers Association's weekly mortgage application activity index at 7 a.m. ET; wholesale inventories for August at 10 a.m. ET; the Treasury Department budget data at 2 p.m. ET; and the Federal Reserve's Beige Book report for September also at 2 p.m. ET.
Also, there's still the possibility that Apple (AAPL) will tip its hand on an iPad Mini launch Wednesday as it's rumored the company plans to send out invitations to a media event tomorrow with the actual unveiling possibly coming as early as Friday or else sometime next week.
The stock could use some positive headlines because, factoring in Tuesday's 0.4% decline, it's still flirting with correction territory, dropping 9.8% since hitting an all-time high of $705.07 on Sept. 21. The selling has been attributed to a number of factors, such as labor unrest at Chinese manufacturing partner Foxconn, customer dissatisfaction with the Apple Maps application, a relatively tempered reception for the iPhone 5, and concerns the iPad Mini will cannibalize iPad sales, rather than be a significant growth engine.
Indicative of the shine coming off Apple, Nomura Research initiated coverage of the company with a neutral rating and a $710 price target. In a research note entitled "The Pie Is Almost Baked," the firm said thinks Apple should be able to meet current Wall Street projections for this year and the next but sees the potential for slowing growth further out."From 2014, developed market growth is seen slowing to single digits," Nomura said. "We expect emerging markets to drive growth thereafter; however, we expect this transition to undermine margins, due to a need for a lower-margin and potentially cannibalizing midrange offering, Android's likely dominance in application availability, and a lower availability of subsidies. We thus believe that iPhone gross margins could contract by up to 10ppt, and this drives our FY14 EPS estimate to 12% below consensus." Of the near-term, Nomura expressed confidence that Apple won't disappoint compared to consensus but the problem with that is Apple's track record is to blow expectations away.
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