Today's Market: New Product Launches In The Tech Wars

by: Matthew Smith

The Nasdaq is at multi-year highs, levels not seen for over a decade. This is in large part to Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) having created a new wave of premium hardware that consumers want to constantly refresh during new product cycles while also supplying critical software and web needs. The hardware has created numerous beneficiaries and driven up the time consumers spend on these web 2.0 sites.

Not to be forgotten in all of this are the guys who helped launch the revolution, Microsoft (NASDAQ:MSFT), Blackberry (NASDAQ:BBRY) and Nokia (NYSE:NOK) but the honest truth is that these names are all struggling to stay relevant with their hardware offerings. We shall see numerous copycat product launches in the next year and today we hear that Microsoft will seek to battle Google in the wearable tech eye wear segment. It will be a huge undertaking, but we are interested to see exactly what the company can come up with and whether it will offer anything new to the category.

Chart of the Day:

We are fast approaching 4,000 on the Nasdaq Composite, a level not seen in 13 years. It has taken over a decade to recover from the internet boom and bust but today the Nasdaq has some of the world's biggest and most profitable companies.

(Click to enlarge)

Source: Yahoo Finance

We have economic news today and it is as follows:

  • Nonfarm Payrolls (8:30 a.m. EST): Est: 183k Actual: 148k
  • Nonfarm Private Payrolls (8:30 a.m. EST): Est: 183k Actual: 126k
  • Unemployment Rate (8:30 a.m. EST): Est: 7.3% Actual: 7.2%
  • Hourly Earnings (8:30 a.m. EST): Est: 0.2% Actual: 0.1%
  • Average Workweek (8:30 a.m. EST): Est: 34.5 Actual: 34.5
  • Net L-T TIC Flows (9:00 a.m. EST): Est: N/A Actual: -$8.9 billion
  • Construction Spending (10:00 a.m. EST): Est: 0.3%
  • Natural Gas Inventories (10:30 a.m. EST): Est: N/A

Asian markets finished higher today:

  • All Ordinaries -- up 0.37%
  • Shanghai Composite -- down 0.83%
  • Nikkei 225 -- up 0.13%
  • NZSE 50 -- up 0.61%
  • Seoul Composite -- up 0.15%

In Europe, markets are trading higher this morning:

  • CAC 40 -- up 0.52%
  • DAX -- up 0.13%
  • FTSE 100 -- up 0.29%
  • OSE -- up 0.40%

New Tech Products...

Today will be a big day for technology companies who are releasing their latest gadgets. Apple is set to unveil their latest iPad and iPad mini models at a function later today. This could be the second big product upgrade that Apple needs to excite both investors and consumers alike and fend off any attempts by Icahn to force the company down a road that management does not want to go down. Right now that situation appears cordial, but a pipeline that does not deliver and a stagnant stock would change that. We remain bullish of Apple shares at these levels and think that we see $600/share by the end of the year. Readers should be tuned in today to see exactly how the company has upgraded the latest generation of their iPads.

We think Apple can finish the year at $600/share, which would be well above its highs for the year if it plays out that way. There is a lot of value here and you have a dividend to deliver solid returns as well.

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Source: Yahoo Finance

Microsoft released its Surface 2 tablet at midnight last night. If you did not hear about it, do not feel bad, apparently no one did as there were no lines and very few (if any) 'techies' excited about the product launch. Microsoft investors need not fret though, because the news reports we found interesting this morning center around the company asking suppliers for gear that would be used to assemble a wearable tech device much like Google Glass. Everyone knew that there would have to be competitors to Google Glass, but the question was where that competition would arise from. Many assumed it would be out of Cupertino but based off of these reports we heard on CNBC early this morning it appears that Redmond will lead the charge...something that has to make Google feel good at this point. The wild card will be whether Microsoft delivers a breakthrough product like they did with Kinect for Xbox or just an also ran product like their Surface tablets.

When we said that Google was about to break out last week, we hardly imagined it would be for 10% in a single day. It is a huge move that happened fast. Google Glass is their next big product launch and if successful and fully "integratable" into people's lives it could be a game changer for the company.

(Click to enlarge)

Source: Yahoo Finance

Nokia sold its handset business to Microsoft already, but today the last phones that were developed by the segment when it was under their control will be unveiled. The company will unveil a new phone and tablet and Microsoft investors should pay close attention to this as there could be some new additions that could be quickly adopted for Microsoft's other products. We suspect that eventually these products will be rebranded under the Microsoft name, but the one thing they have going for them right now is that customers know that there is an entity that will stand behind these products. That is not the same situation that Blackberry is facing right now and it is hurting business. Our guess is that the entire slate of Microsoft/Nokia products released today will be duds, much like Blackberry's latest launches, but will benefit over time from Blackberry's continued slide.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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