Apple paves the way to Bull rallies. The world’s most valuable company has the biggest influence in the S&P 500 Index and its participation in the market-capitalization weighted benchmark is essential to any sustainable rally. Apple shares beat the S&P for a ninth-consecutive week and have helped fuel a 22% rebound in the tech-heavy Nasdaq 100 from a June low.
Apple is a so-called tent-pole stock that dominates investor attention and can help define investment narratives, according to Nicholas Colas, co-founder of research firm DataTrek. In that respect, he said, Apple’s recent performance is “quite heartening.”
The S&P 500 is still down 10% in 2022 despite rallying since June. Apple’s shares, on the other hand, are on the cusp of turning positive for the year after tumbling with other technology stocks in the first half. Its shares have outperformed in both of the bull markets since the 2008 financial crisis.
In snapping up Apple shares, investors are betting that the iPhone maker’s strong balance sheet will allow it to continue returning cash to shareholders and wring big profits out of its more than 1 billion users despite the potential for a recession in the US with the Federal Reserve bent on fighting soaring inflation.
Comments