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Apple This Week: Shares Dip To September Levels

Apple’s late September, early October recovery has lost steam. Here is what seems to be pushing the stock back to last month’s levels.

Apple stock has drifted lower. After shares reacted well to the iPhone 12 announcement, last week, they began a steady descent to late September levels. Between the close on October 16 and October 23, Apple was down about -3.3%.

No one specific factor or development seems to have pushed Apple lower in the past five trading days. With current-year P/E of 35 times still looking a bit rich and the stock still up about 90% in the past 12 months, investors might have been more inclined to lock in gains ahead of earnings week.

The FAAMG ex-Apple group, on the other hand, performed much better: 1.8% for the week. The S&P 500 sat between Apple and the rest of Big Tech, down 0.5%. The graph below summarizes this week’s price action.

Bull drivers

The best day of the week for Apple was Tuesday. On every other day, shares were down – in some cases sharply.

More than anything else, it looks like bullish action was driven by the occasional broad market strength. On Tuesday, hopes resurfaced that a fiscal stimulus deal would be inked before the election, as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin “made progress in stimulus talks”.

However, it is possible that the early read on iPhone 12 orders have also given investors a reason to hope for a strong holiday season.

Bear drivers

Generally, the week was bearish for Apple, as it was for the broad market. Until Wednesday, Apple and the S&P 500 traded very much in lockstep, heading generally lower.

Thursday, however, was a different story. Apple shares dipped about 1% as the S&P 500 headed higher. It is hard to pinpoint what exactly went wrong for Apple that day, as even the rest of FAAMG held up well.

The selloff in Apple extended into Friday, as we now stand within one week of the company’s fiscal fourth quarter earnings day. It is possible that investors might be feeling uneasy about the soon-to-be reported numbers.

Below is a chart that compares the performance of Apple stock against the S&P 500 and the industry. Apple’s dashboard continues to look better in the longer term than in the more recent past.

Explore more data and graphs

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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)