Apple had a solid day of returns on Monday, March 22. The stock was up 2.8%, beating the performance of the S&P 500 by about 2 percentage points, despite shares being off the 3 p.m. intra-session highs.
Below, the Apple Maven looks at the most likely reason why Apple stock recovered, after losing steam through the end of last week and dipping below the $120 mark once again.
All about market sentiment
It does not look like company-specific developments drove Apple's share price this Monday. Credit for the stock's rebound to $123.39 apiece should be given to the general mood of the market over interest rates that pulled back from the recent peak.
The 10-year treasury yield ended the day at 1.68%, about 7 basis points below the top reached on March 18. As a recap, longer-term rates continue to climb despite the Federal Reserve's commitment to keep the short-term end of the curve pinned near zero. This is primarily a reflection of market expectations for higher economic growth and inflationary pressures later in 2021.
As I highlighted in a recent article, yield movements could be an important driver of Apple stock's performance this week. In my view, the other couple of variables worth monitoring are:
- chatter around new products to be unveiled within the next month and;
- the ongoing battle between Apple, other tech players and regulatory agencies around the world.
Are 2.8% gains unusual?
Below is the distribution of daily returns in Apple stock over the past decade. A gain of 2% or better, such as the one observed this Monday, has happened in 1 out of every 10 trading sessions, on average.