I just read an interview with a techie that was waxing on about the early days of the Internet.
The interviewer transitioned brilliantly:
For the record, Miller, who is 24, spent “the early days of the web” attending nursery school
Oh, the delightful presumption of youth… !
Lower Oil = More Money In People’s Pockets = Higher Economy = Better Earnings = Better Stock Market
I think that formula says it all… although, it may seem a bit odd given the absolute crushing of the market recently.
No doubt, I have my backside waving in the wind right now.
P.S. Since the price of oil affects virtually 100% of the cost of everything, this means we’ll all have a few extra bucks in our pockets… and since consumer spending is 70% of the U.S. economy… and the U.S. economy is the commerce engine of the world… this turns out to be a very big deal indeed.
Misleading headlines happen all the time.
The big headline this morning from the Wall Street Journal:
That’s what everyone picked up. You might think, “wow, Apple’s really blowing it… yet another problem!”
If you read the article, though… or even just the subhead below the headline:
Apple Suppliers Concentrating on Meeting Demand for New iPhones
… you’ll find the real reason for a potential delay: Because they’re swamped just trying to fill iPhone demand.
That’s a tremendous problem to have… unfortunately you’d never pick that up from the headline.
UPDATE: Someone finally got it right! From the BusinessInsider:
Apple Delays Plan To Make A Giant iPad So It Can Pump Out More iPhones
See the difference? One suggests something negative… the other gets to the heart of the story — that overwhelming demand for the iPhone is causing Apple to juggle manufacturing — something that is clearly positive in the big picture.
What has always amazed me is how quickly — even viciously — sentiment can change.
Yesterday… even this morning… AAPL just felt… stuck.
Truth is, AAPL has been treading water for about three months now.
Certainly it’s had its share of outstanding news… but in the battle of bulls vs. bears, the bears were able to make the most out of some pretty flimsy stuff over the last month… iPhone’s bending (a grand total of 9 out of 10,000,000)… iOS 8 growing pains (pretty standard for any major new OS)… China getting delayed (until next week, not 2015 as they were suggesting)… downgrades that weren’t downgrades (someone lowered their target price above the current AAPL share price and still called it a downgrade?)… and so on.
I have to admit that yesterday, as the market was tanking, things felt a bit bleak.
Maybe that’s what they mean by “capitulation”?
Because… just a few hours later… AAPL now feels like it’s ready to e-x-p-l-o-d-e.
Here’s what is different:
(1) Carl Icahn announced that he’s going to start being an activist pain-in-the-ass again. Wall Street bulls love when he does that… and no one seems to do it better than Carl these days.
(2) Apple — for the first time ever — is one of the top 5 suppliers of PC products. Not bad for an after-thought business.
(3) While the PC numbers aren’t the major earnings driver at Apple, I think a few analysts may take the time to raise overall estimates yet again… and this time include the somewhat overlooked fact that iPhone 6 demand in China is through the roof.
(4) There’s a big announcement October 16th… most people think it’s to refresh the iPad and laptop line-up… but some news sources are saying that we’re about to get… Apple TV… ! Anyone that reads my blog know I think this is the next major, major, major revenue driver for Apple.
(5) All of this drives (frenzies?) into AAPL earnings on Monday, October 20th… which is about as big an event as there is on Wall Street.
I always believe things swing too far in any one direction. The last three weeks have been downers for the major markets. Given the Fed comments today, I think we’ll see things swing in the other direction for a bit… which, adding that to the five points above, means I think AAPL is going to go on a mini tear.
UPDATE: Oppenheimer looks to be the first firm out-of-the-gate to raise AAPL estimates… and up price target to $115.
Could it be… Apple TV?
From Investor’s Business Daily:
Long-rumored Apple TV app store could be reality soon
I’ve written about this for a while (here and here)…
… like AAPL did to the entire cellular phone industry, I’ve been eagerly awaiting when APPL turns the even-more-massive broadcast world on its head.
Maybe sooner than later?
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