Shares of Apple were down 4.5% on Thursday after Bank of America analysts delivered the stock a rare downgrade. The analysts lowered their rating from buy to neutral, also cutting its price target from $185 to $160 per share. They said they anticipated “weaker consumer demand” over the next year and pointed to macroeconomic challenges.
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That quote explains the radical reversal Thursday of the 500 point gain on Wednesday. The ratio of new highs to new lows had reached the extreme (lots of new lows versus highs) which had marked past short term bottoms. But the downgrade caused Apple to bumble $7.36 or 4.9%. The market reaction made it clear that yes, everyone owns Apple whether they realize it or not.
Apple carries the highest market capitalization of any stock. Many ETFs, mutual funds and exchanges, have included it to better boost their performance. But on Thursday we learned that works both ways. And I suspect Bank of America, which owns Merrill Lynch, is correct. Apple just released iPhone 14 and Watch 8. Does everyone need to upgrade to yet another very similar to the last product?
Let’s check the new high low indicator again. The dead low was September 23 with 1,100 more new lows than highs. The number reversed into Wednesday September 28 to just above minus 300. But the plunge Thursday took it back to minus 812. But this is still above the September 23 low. As I write pre-market Friday, Sept. 30, the industrials all are flat. We need a weekly close over 30,000 to turn the daily trend up. I think we will get it. The main trend is down and a rally is counter trend. But the extreme of recent new lows suggests at least a short term, say two weeks, bounce into October.
The time is ripe for a women’s revolution in Iran and Russia. In Iran, 22 year old Masha Amini was arrested for violating the hijab rule, staying covered in public. She died in custody, no doubt beaten to death. Photos show streets jammed with people, cars, and motorbikes, all protesting. Ayatollah Ali Khamenei is out of step with an increasingly Westernized culture. Worse his health is failing.
Meanwhile, there actually is an organized Committee of Soldiers’ Mothers of Russia. This group was instrumental in ending the Chechnya adventure saving countless Russian lives. Now we have stalled traffic six miles long at border crossings. Men are desperate to escape the 300,000 man call-up for more sacrifice in a losing position in Ukraine. Ukraine has established a hotline for Russian surrender. And Russian soldiers are calling in.
