Apple has turned itself into a stable "widows & orphans" stock with stock split and dividend hike.
Investor flight to safety favors stocks with strong cash flow and safe business model.
Apple's surge does not reflect optimism for tech, but more capital flowing to safe businesses.
If Tim Cook ever tires of his job as Apple CEO, he could maybe start a macro hedge fund. The market timing of Apple Inc. (NASDAQ:AAPL) is exquisite, re, turning itself into a widows-and-orphans play (via 7 for 1 stock split and fat dividend hike) just as investors show panicky demand for safety, quality, and cash flow, with "boring the new sexy" in a very big way.
The market hates everything high-beta, social media and cloud right now, as evidenced in the horrible carnage of Salesforce.com (NYSE:CRM) yesterday (and plenty of other things). We laid out reasons why (based on positioning) in "Tiger Soup" - long story short, lots of smart hedgies (particularly Tiger Cubs) are now looking not-so-smart (and may in fact be getting killed).
The AAPL surge is not reason to be optimistic on the tech side - in fact we'd say the opposite, it is more evidence of a late-cycle rotation into "anything that isn't melting down." AAPL also remains a double-digit percentage of Nasdaq QQQ Trust (NASDAQ:QQQ), thus helping explain the wicked tail in QQQ yesterday.
For risk assets in general, if anything there is probably more fake-out shake-out high-vol drama ahead. As Samuel L. Jackson so eloquently put it in Jurassic Park: "Hold on to your butts!"
Disclosure: I am short CRM, QQQ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.