Apple stock has just had one of its best weeks in 2020. After dipping close to their three-month lows in the previous week, shares are back on the rise and about 11% off the all-time peak.
As I mentioned in a previous post, Apple has largely run out of catalysts in 2020, with the iPhone 12 announcement and the last earnings report of the year now in the rear view mirror. But this is not to say that Apple stock will plateau.
Election could be resolved
There are two potential stock movers that Apple investors might want to keep an eye on. One impacts the market as a whole, while the other is company-specific.
Regarding the first, it is highly likely that a new US President will be known by the time that the opening bell rings in New York, on Monday. To be clear, vote counting will likely not end until much later, let alone the legal disputes initiated by the Trump campaign.
As I write this paragraph, on Friday, only Decision Desk HQ has already called the election in favor of Joe Biden, but the odds of the Democrat taking over the White House seem quite high. Not settled yet is the race for Senate majority, which in turn is leaning more Republican.
In any case, the coming week should be one of “election decompression”. Generally speaking, the end of a polarizing election should be a bullish development for Apple and the market, since risk perception is expected to decline.
However, keep in mind that Apple has already rallied significantly in the past few days. Upside potential from election decompression could be limited at this point.
Mac highly anticipated
The other big development of the week will be Apple’s “One More Thing” event (see video above for more information). While we are at it, I invite everyone to follow the Apple Maven’s real-time coverage, which will start on November 10, at 12:45 p.m. EST.
To be fair, I do not believe that the event will bring enough surprises to cause Apple’s share price to fluctuate much. Still, I believe that a few topics relevant to the investment thesis are worth keeping in mind.
For example, will the prices of the ARM-based Mac devices change? If so, will they support sales volume growth (i.e. lower price) or margin expansion (i.e. higher price)? Also, will Apple take advantage of this event to expand its wearable and home product lineup?
Stay tuned to find out.
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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)