Apple and Intel Fail to Impress: Waiting for the Fed's Next Move 15 comments
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Slowing US Economics have pushed sellers to the forefront this entire
week, and today's 300 point Dow tumble was another straw in the year to
date tumbling market house. S&P stands down 9% year to date, while
the Nasdaq is off 11%.
The Nasdaq was hit hard this week as technology sold off on those very same economic fears. The winners heading into the tail end of 2007 were those being bid up to ever higher 52-week and all-time highs and soon of these companies are feeling the financial fallout as their P/E ratios get slashed worst than Real Estate on Elm St.
Apple's (AAPL) marquee event MacWorld, was deemed a failure this year as everything announced was expected and it included nothing as revolutionary as last year's iPhone. A Router/Storage hub, an iTunes movie rental service, new iPhone software and the new thin laptop that has been criticized by many as not hitting any particular market. Only time will tell whether the super thin Mac Book Air will sell decently well at its $1800 price point. Sony (SNE) has their ultra-thin laptop line well over the $2000 price point for years. Apple shares have fallen from their $202 record and now sit just over the $160 mark, with expected quarterly blow-out earnings numbers coming next week. A troubling fall for a company built on Steve Jobs hype, which now has analysts falling over themselves reiterating its cheapness/value opportunity.
These are troubling economic times nonetheless, as investors look for safer havens, seeing their financial, consumer and technology faithful stocks being sold off in great numbers.
The Googles (GOOG), Baidus (BIDU) and Amazons (AMZN) are all down significantly as the high P/E ratio game of Internet companies is shrinking due to recessionary economic factors and fears. The banks are steeped in mortgage losses and more potential dividend cuts are luring Investors away. Even hot commodities of late like Oil and Gold have cooled quickly and abruptly by the sell triggers.
All eyes now shift to the Federal Reserve and Chairman Ben Bernanke. Traders expect at least a .5% Interest Rate cut at the next meeting, and Bernanke has pledged the Fed will be aggressive in trying to fend off recession. We'll see at the end of the month how it all plays out, but till then expect the same volatility and uneasiness when choosing the right things to buy, or in fact short sell.
The Nasdaq was hit hard this week as technology sold off on those very same economic fears. The winners heading into the tail end of 2007 were those being bid up to ever higher 52-week and all-time highs and soon of these companies are feeling the financial fallout as their P/E ratios get slashed worst than Real Estate on Elm St.
It didn't help this week that Intel (INTC) missed numbers, by a couple cents and came in on the low end of revenue guidance, even though business is just fine (Revenue guidance of up to $10Billion for next quarter versus the estimated $10.1Billion). The stock took a 12% hit that day, putting it under $20/share.
Apple's (AAPL) marquee event MacWorld, was deemed a failure this year as everything announced was expected and it included nothing as revolutionary as last year's iPhone. A Router/Storage hub, an iTunes movie rental service, new iPhone software and the new thin laptop that has been criticized by many as not hitting any particular market. Only time will tell whether the super thin Mac Book Air will sell decently well at its $1800 price point. Sony (SNE) has their ultra-thin laptop line well over the $2000 price point for years. Apple shares have fallen from their $202 record and now sit just over the $160 mark, with expected quarterly blow-out earnings numbers coming next week. A troubling fall for a company built on Steve Jobs hype, which now has analysts falling over themselves reiterating its cheapness/value opportunity.
These are troubling economic times nonetheless, as investors look for safer havens, seeing their financial, consumer and technology faithful stocks being sold off in great numbers.
The Googles (GOOG), Baidus (BIDU) and Amazons (AMZN) are all down significantly as the high P/E ratio game of Internet companies is shrinking due to recessionary economic factors and fears. The banks are steeped in mortgage losses and more potential dividend cuts are luring Investors away. Even hot commodities of late like Oil and Gold have cooled quickly and abruptly by the sell triggers.
All eyes now shift to the Federal Reserve and Chairman Ben Bernanke. Traders expect at least a .5% Interest Rate cut at the next meeting, and Bernanke has pledged the Fed will be aggressive in trying to fend off recession. We'll see at the end of the month how it all plays out, but till then expect the same volatility and uneasiness when choosing the right things to buy, or in fact short sell.
Disclosure: Author owns AAPL, GOOG
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This article has 15 comments:
Chris, let me give you some advice, LEARN OUT TO WRITE, you suck.
Thomas A. Gaughan
Anyone that says this: "A troubling fall for a company built on Steve Jobs hype" must be going to a lot of trouble to avoid looking at any numbers from the business.
Steve Jobs nor long term investors care one iota for short term rises and falls. We know where APPL is headed, and so long as they continue as they are all will be well. Better than well, amazing in fact.
There are so many complete idiots talking about Apple these days that I despair...
By the way, your English grammar in your writing needs to be polished.
That was not related to the stupid bankers or financial mess. Apple is one, if not the best, stock to have and its value will return when all these fools get it correct. Steve Jobs could help the Fed!!! They should get his thoughts on how to correct this sub prime mess and banker's greed!!!
MESMD
Thomas A. Gaughan
How soon the media forgets. Prior to the 2007 Macworld event the iPhone was already an expected announcement. Its concept, before, during, and after 2007 Macworld was surrounded by bashing the phone. Not enough battery life, screen that scratches, touch will never be accepted, on and on. Steve Ballmer stated flat out it would be a flop. And this years Macworld is now considered a “failure” because there's nothing equivalent to the iPhone? Too funny.
The stock was on fire because of Apple’s growth in its overall product line throughout 2007, this growth will continue, and while pundits may think this new thin lap top is a non event, neither was the iPhone in 2007. The iPhone was considered a failure before it was launched, sounds like this story is remaking itself with this new ultra thin laptop.
Youse gotsa learned howse two rite!
Do you know how to read a financial statement?
In addition, the continued increase in market share is a positive and will continue to be as these new switchers will be recurring buyers of Apple products in the future. I'm sure their in-direct advertising of Apple will help to produce more switchers within their own family/circle of friends.
Also, the the fact that SJ got all of the major studios to sign up for iTunes movie rentals is a huge deal. This fact hasn't been mentioned much. Studios would not have agreed to this unless they understood the current DVD-sales situation and thought it would prove financially profitable.
Lastly, Mr. Krasowski wrote that Macworld ". . .was deemed a
failure. . ." I read the various reports of this, and on the surface I can see how MW08 did not compare emotionally to MW07 and the introduction of the iphone. In my opinion, however, one must remember that these responses are based on the fact that everyone knew what would be announced (aside from the MBA). Investors and media cannot expect every MW to be better than the last. I'll take the 4 million iphones to date, increased computer market share, 80 percent satisfaction rating for Leopard, and ipod domination.
In my opinion, the stock will rise as investors see the situation for what it really is.
By the way, do you have an opinoion on CES and the Surface, or that little box with a long wire attached that Gates was pointing to buildings to see when was the last time he was there. Make yourself useful and write about something that really doesn't matter.
It's also interesting how so many commenters can be so critical of one's grammar, yet they themselves have so many typos in the same sentence..."LEARN OUT TO WRITE". Seriously?
Just because you've looked up how much their sales have grown year over year, or notice that a product "seems" to be a success doesn't make you an analyst or a stock guru. This company could have negative returns in 2008 --- does anyone realize this? I wouldn't bet on that myself, but the complete lack of acknowledgement that this is a possibility is both mind-boggling and dangerous.
SA should refuse articles on AAPL altogether if this BS is going to continue.
It is nice to see some discussion come out of this. But I'm a little perplexed at how a "market overview" article has taken such an Apple centric approach. I'm merely commenting on how recessionary fears have taken out the best in technology. I've been an Apple long for a very long time, and have written focused articles on the company many times before.
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I know that's a lot to focus on one company but it was and still is the biggest holding of the WC Fund.
I'm not a professional analyst, never claimed to be, I write about markets, things I would be investing in and things I would stay away from. SeekingAlpha has chosen to reprint my articles and I believe that stands for something from a quality perspective.
Regards,
Chris Krasowski
These Apple Heads who are getting so angry about someone merely writing what they feel the numbers hold for Apple aren't going to be toughing it out with second jobs (no pun intended) after the free fall the stock endured. We're coming up on a 50% correction if the stock gets down to 100. Whether that's undervalued or not remains to be seen. We have to see what the new American consumer, without the benefit of home equity withdrawals equal to double his income, decides to purchase in the coming year or two.
But I will say that if readers listened to this analyst when he wrote the article instead of the Second Jobs attacking him, they would have saved tens or hundreds of thousands of dollars in the past few days.