FAANG-Apple continue to fall as US market pulls back ?
This is a random sample photo !
I used to post comments & reviews of US market performance almost daily.
Since the start of 2024, I have not gotten back into the swing of things for the simple reason that there do not seemed to be “real” tangible reason/s to explain the erratic US market behaviour.
Having said that, there have been some official reports out, so rounding up all these to get everyone up to speed.
Hopefully they do shed some light as to why the market is behaving as it is.
(1) Producer Price Index (PPI).
US’s December 2023 Producer Price Index (PPI) data, revealed a slight uptick from 0.8% to 1.0%, compared to revised November figure. (see above)
It warrants cautious observation without immediate alarm.
The modest 1.0% PPI is still “lower” than analysts forecast of 1.3%, suggesting possible signs of inflation cooling.
(2) US Retail Sales (Monthly).
US’s December 2023 retail sales reported a slight uptick of +0.3% compared to November's 0.3%, paints a mixed picture with both positive and nuanced aspects. (see above)
Meaning:
Despite on-going concerns about inflation and economic slowdown, consumer spending held steady during the crucial holiday shopping period.
The 0.6% data exceeding analysts’ 0.4%forecasts suggests potential consumer resilience and adaptability in the face of challenges.
(3) US Weekly Jobless Claims.
US weekly jobless claims for week ending xx came in at 202,000.
This was slightly below analysts’ expectations of 210,000 claims.
It is also 1,000 claims lower than previous week’s revised data of 203,000 claims, suggesting a resilient labour market.
(4) Fed Official - Chris Waller’s speech.
On Tue, 16 Jan 2024, at The Brookings Institute, Fed gov. Christopher Waller reiterated the followings:
The Fed’s inflation policy should continue to put downward pressure on demand, allowing the central bank to achieve the 2% inflation target.
As long as inflation does not rebound or fail to drop, he believes the Fed will be able to lower the federal funds rate this year.
Timing of the cuts and the actual number will depend on the incoming data.
Factors that would delay or derail rate cuts includes (a) economic activity does not continue to moderate and (b) inflation reaccelerates.
Rate cuts will not commence until Fed officials were all relatively convinced that inflation was sustainably near the target.
(5) US 10 Years Treasury Yield.
On Wed, 17 Jan 2024, the 10-year is currently trading near 4.1% after reaching a recent low closer to 3.8%.
However, since late December, it has been rising steadily by about +30 basis points.
No denying that a rising 10 years Treasury yield will lure away some of the resources bound for US market, as it makes bonds a more attractive investment comparatively speaking due to the offer a guaranteed return with lower risk.
(6) US Market - 17 Jan 2024.
US market continued to lose grounds on Wed, 18 Jan 2024 — building on Tuesday's losing start to the holiday-shortened week.
Coupling that, the reality of a diminishing-probability of a Fed rate cut in March 2024, helped to push the market down further.
CME FedWatch tool:
The CME FedWatch tool has investors betting a 57% probability of a March 2024 rate cut. (see above)
This is down from a week ago (at 67%) and a month ago (at 71% probability).
By the time market called it a day:
$DJIA(.DJI)$ : : -0.25% (-94.45 to 37,266.67).
$S&P 500(.SPX)$ : -0.56% (-26.77 to 4,739.21).
$NASDAQ(.IXIC)$ : -0.59% (-88.73 to 14,855.62).
As investors brace for another possible bloodshed trading day, I am curious what are the x-factors that will be able to stamp the red tide?
On Wed, 17 Jan 2024 — FAANG & Magnificent 7 stock $Apple(AAPL)$ continued to consolidate in the midst of an erratic market and also lingering bad news that has plagued the World’s most valuable company since December 2023. (see below)
The long running dispute between $Masimo(MASI)$ a medical technology company and Apple Inc has finally spilled over after a long drawn legal battle.
This comes about after two orders issued by the US International Trade Commission (ITC) on 26 Oct 2023 that would restrict Apple’s ability to sell products that use the Blood Oxygen feature after an intellectual property disagreement between Apple and Masimo.
With the latest ban by the U.S. Court of Appeals for the Federal Circuit taking effect on Thu, 18 Jan 2024, again Apple sales of its Apple Watch will once again be impacted.
The severity of financial woes due to lack of Apple Watch sales over last Christmas will all be revealed when Apple announces its quarterly earnings on Thu, 01 Feb 2024.
In the meantime, Apple might just continue on a “correction” path. (see below)
Above is Apple Inc’s past month stock price movement.
To date, it has lost -6.74% in stock price.
While it bottomed at $181.18 per share, on 05 Jan 2024.
Will Apple Inc continue on its downwards trend for the rest of January or will this be the not to miss opportunity to shore up on the world’s most valuable company?
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Do you think US market will continue to correct until end January 2024?
Do you think now will be a good time to load up on Apple OR wait for a lower entry price?
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