Wednesday Wrap-Up: The Bear Bites Into Apple - TheStreet

Miss me? 

It's been a hot second. 

Anyway, I bet you missed the wrap-up more. I mean, how else are you supposed to know what to read at the end of the day?

Of course, I'm kidding. Kind of. 

Happy hump day, y'all. Let's celebrate it with the top stories in the market today.

Apple's Trudging Into Bear Market Territory

Are you worried? 

TheStreet's Jacob Sonenshine broke down what investors need to know as Apple (AAPL) - Get Report shares dipped. 

Late on Monday, Goldman Sachs cut its price target for Apple to $209 a share from $240 after one of its suppliers, Lumentum Holdings Inc. (LITE - Get Report) said one of its key customers requested a shipments reduction. Apple uses Lumentum's components for its Face ID facial recognition system on the iPhone X, making it highly likely that it was Apple that requested the reduction. 

Apple planning to buy fewer parts from Lumentum would signify it will sell fewer iPhones going forward than initially expected. Apple said in its most recent quarter that will no longer give unit sales figures for the iPhone and iPad as it focuses on overall revenue, but a material reduction in units would still reduce revenue expectations.

Zev Fima, research analyst for Jim Cramer's Action Alerts Plus portfolio, which owns Apple, said that "we remain of the opinion that Apple is a stock to be owned, not traded. While the rest of Wall Street is focused on unit sales, we remain focused on the growth in services, which provides favorable margins and a recurring revenue stream, which we continue to believe will ultimately justify an expanded valuation multiple."

The Potential Liability That PG&E May Face

PG&E (PCG) - Get Report may be on the hook for the fire in Northern California. 

Need some more explanation? TheStreet's Tony Owusu reported on the gas and electric utility company's misfortune. 

The company filed an 8-K document with the Securities and Exchange Commission saying that if it were found liable for the blaze its insurance will not be able to cover the damages.

"While the cause of the Camp Fire is still under investigation, if the Utility's equipment is determined to be the cause, the Utility could be subject to significant liability in excess of insurance coverage that would be expected to have a material impact on PG&E Corporation's and the Utility's financial condition, results of operations, liquidity, and cash flows," the filing said Tuesday, Nov. 13.

While the origin of the Camp Fire blaze that has scorched 130,000 acres of California forest is still unknown, there are signs that PG&E's power lines may be partly to blame.

The San Jose Mercury News reported that a business owner in a North California town near the origin of the fire received an email from the PG&E alerting her that workers were being dispatched to fix a sparking problem on a nearby power line. 

That news followed the revelation of a firefighter radio transmission that suggested that a malfunctioning PG&E power line may be responsible for the most destructive wildfire in the state's history.

Looking to Trade General Electric?

TheStreet contributor Bret Kenwell takes a look at General Electric (GE) - Get Report .  

The stock has been a sinking rock for more than a year now. When the company reported earnings back in October 2017, it was clear that there were issues. A halving of the dividend a month later and Warren Buffett bailing on GE a few months later were further signs of deterioration. 

Also, that pesky analyst Stephen Tusa of JPMorgan hasn't stopped torturing bulls, with negative note after negative note.

He continually lowered his price target, only to see GE sink lower and lower. He hasn't stopped yet, either, cutting his price target to $6 after General Electric's latest earnings report. Management painted a not-so-great picture and all but eliminated the quarterly dividend, cutting it by more than 90% from 12 cents a share to 1 cent a share. The company also missed on earnings and revenue expectations. 

All of this has buried GE stock, causing it to fall from $11 before earnings on Oct. 30 to new lows of $7.72 just a few days ago. Is the beatdown too severe or could more downside be in store for GE stock?

The problem with General Electric is the uncertainty. The pain won't stop until investors feel that the business is bottoming. That's clearly not the feeling right now. GE's recent announcement saying that it would accelerate its stake reduction in Baker Hughes (BHGE - Get Report) in order to raise capital by the end of the year isn't improving that sentiment.