What Else Can You Say At This Point?
The closing bell on Friday can't get here quick enough. Investors have been put through the wringer this week with the wild swings in the market and bone-crushing down days. Financial media pros such as yours truly are hearing different things from a variety of parties. Many think the selling is just beginning as bad bets on volatility continue to be unwound. This continues to spread across Wall Street like a tsunami barreling toward the shore. Others believe this "healthy correction" (I have never believed stock price plunges are healthy seeing as people lose money) is nearing an end, and we are one TV producer phone call away from having Warren Buffett on-air saying that stocks are now too cheap too ignore (the buy signal). Whatever camp you fall in, what can't be denied is the mind-blowing rotation out of stocks this week and what it means for this aging bull market. The S&P 500 is down 10.2% from peak to trough and the market cap for global equities has shed $6 trillion, according to Bank of America Merrill Lynch. BofA's rather predictive "bull and bear indicator" remains in "excess bullish" territory, meaning stocks are a sell even after the crash. The only near-term catalyst for the market is whether companies begin to resume strong corporate buybacks in coming weeks. If they do it would be a signal that profit margin peaks aren't here thanks to rising inflation and bond yields. If not, look out below. Stay strong folks, the world isn't ending ... it's just getting a little tougher to make money via the stock market.
Apple Bulls, You Have to Hate This
Think for a second why you own 500 shares of tech king Apple (AAPL) . First on the list probably is an expectation of impressive growth for as far as the eye cansee. Another is that consistent belief that Action Alerts Plus holding Apple is secretly working on a project in an underground basement that could alter the course of humanity (like the iPhone). The other factor is oodles of cash just waiting to be dispersed in giant dividend checks. Nowhere in the Apple thesis does it say buy the stock because it's the ultimate safety play. Interestingly though, that's what the market has said this week on Apple -- shares have nicely outperformed the broader market averages. Should you be an Apple bull, the action has to be slightly disturbing -- Apple as a borderline utility play? The king of all tech nothing more than a "safe" dividend payer? Looking at this action, might want to sell into strength ...
On a Positive Note
Amid the sea of carnage that is this week's stock market, there is Action Alerts Plus holding Nvidia (NVDA) -- a tech company that unlike Apple continues to put up monster growth. More importantly, Wall Street is showing it still wants to reward Nvidia for its torrid growth even in a short-term bearish market. Nvidia blew away profit estimates on Thursday evening on the back of torrid demand from gamers, AI developers and crypto miners. Nice analysis of the quarter here from TheStreet's tech columnist Eric Jhonsa. Added bonus: On the earnings call, Nvidia called out a lift to its business from eSports activity and Activision Blizzard's (ATVI) Call of Duty: WWII and Destiny 2. Activision Blizzard, another Action Alerts Plus holding, also reported a strong quarter on Thursday evening.
Apple's HomePod has hit the market. Beware Amazon (AMZN) .
A post shared by applewmt (@applewmt) on
Today, Morning Jolt went off platform on Periscope. Here's what you need to know.
More from the Morning Jolt Archives: