The losses have pushed Apple’s market value down to about $2.84 trillion, nearing Microsoft’s $2.75 trillion.
Yahoo Finance
Apple has lost $164 billion in market capitalization but as noted is still the world’s most valuable company. Two investment firms downgraded the stock taking it from $200 to $182.50 on Friday. Hardly the end of the world but on January 2 this left a $9 gap in the price chart. A gap occurs on the downside when sell orders overwhelm buy orders, price has to drop to find buy and sell equilibrium. The other six are holding up but we have no new highs in the group.
But why did it take the warning of two analysts? Apple has become a phone company now on its 15th iteration at $1,000 a copy. It is offering trade-in discount for older phones. The weakness in the Chinese economy, which this column has noted, makes future sales expansion in China doubtful. And really there are no recent breakthroughs in personal computers or laptops which puts a cap on growth in that sector as well.
Momentum indicators for the major indexes are slowly rolling over. We are still monitoring an expected high in the markets for this month.
Crude oil has been in a trading range of $68-78 dollars the last two months. Despite two ongoing conflicts, the reason seems to be that there is plenty of it being produced. Team Biden’s best efforts to discourage American energy independence has not dampened enthusiasm for West Texas Intermediate. This week Apache APA acquired Callon Petroleum in an all stock deal valued at $4.5 billion. APA will issue 70 million shares in the second quarter. This depressed the APA price 7% the day of the announcement. This adds 120,000 acres in the Delaware Basin located in the western Permian. Our point is that there is still plenty of enthusiasm for crude oil. Planes and ships do not travel on solar energy.
A year ago the low in APA was $32. At $34 this bears watching.
Much is made of the now falling inflation rate. Our take is that this is the start of higher interest rates and inflation. Interest rates on the ten year Treasury note rose to 5% and then fell recently to 3.8%. Now rates are moving up again. Today that rate is 3.98%. I expect higher rates for a few weeks, and then a final low around 3.5%. After that rates will likely resume their rise. The Federal Government has simply spent too much money without an increase in productivity.
