Welcome to a packed Wednesday — the Fed’s first meeting of 2019, U.S.-China trade talks, tons of earnings and a polar vortex.
Up over 5% in premarket, Apple shares are on a tear. However, much of the sentiment behind the rally is that the bar had already been so low for Apple following dialed-back guidance from CEO Tim Cook earlier in January. A previous jolt higher in 2016 also was precipitated by relief that performance wasn’t as ugly as had been feared, coming after a second-straight quarter of shrinking iPhone sales.
Here’s Piper Jaffray nice summation of the investing mood around the Cupertino, Calif., tech giant following its late-Tuesday results.The strategists stick to an overweight target and an $187 price target — a fair piece from here still: “Many investors feared a more significant guide down was coming for March quarter revenue and with the “bad news,” which turned out not as bad as expected, out of the way, some that had been sidelined will likely re-visit the stock,” said the analysts.
But bear in mind the “explosive” after-hours and maybe regular session move, needs a little context, provided here by Slope of Hope blogger’s Tim Knight:
That brings us to our call of the day from Mike O’Rourke, chief market strategist at JonesTrading, who is furrowing his brow over a recent trend of investors rewarding companies for delivering not-as-nasty as-feared quarterly results this earnings season:
“The bad visibility is better than no visibility theme continues to play out throughout this earnings season,” O’Rourke tells clients, in a note. For example, AMD is looking at a nice pop this morning, even after lowering first-quarter guidance, then there is 3M
both of which rallied after below-consensus guidance on Wednesday.
“Investors appear to be more comfortable buying shares once a company has provided some clarity as to how weak the near term fundamental outlook is,” the strategist explains. “It provides a measure through which investors can quantify the potential near term downside.”
Then what happens is those holding short positions — bets that an asset’s value will decline — scramble to cover their positions as the company for which they had the correct fundamentals, heads the other way, he says.
“Chasing such rallies too far is a dangerous game, because the fundamentals are still heading in the direction opposite the share price,” says O’Rourke, who, of course, started out his note carping a bit about some over exuberance on Apple. Let the bull/bear fight begin.
Today we will hear why $AAPL is cheap (at $164) from the same talking heads who thought $AAPL was cheap (at $230) last August.
As I tweeted “investment wisdom is always 20/20 when seen through the rear view mirror.” @SquawkCNBC @andrewrsorkin @beckyquick @tomkeene @lizclaman
— Douglas Kass (@DougKass) January 30, 2019
Things are brightening right up, ahead of the open with Dow
and S&P 500
now in the green, led by a big jump in Nasdaq
futures, thanks largely to Apple. Tuesday’s action saw the S&P 500
finish lower, but the Dow
managed a gain on the back of 3M and Pfizer.
are modestly up, while the dollar
with the pound
recovering somewhat after falling on back of late Tuesday’s Brexit votes in the U.K.
are largely down across the board, in Asia, stocks had a mixed day.
On Wednesday, we heard from the bond king, otherwise known as Doubline Capital founder Jeffrey Gundlach, who sounded the alarm over the “most recessionary signal at present” is a reading on consumers’ future expectations relative to how they see the market right now. He says that couldn’t look worse right now.
Our chart of the day offers more evidence on that front. It comes from Otavio “Tavi” Costa, global macro analyst at Crescat Capital, who tweeted out the following chart that shows a correlation between utilities and Treasurys, which has just turned south again:
He calls it a “key indicator,” signaling recession on the horizon. “It’s a battle of the safe-havens that sounds an alarm when credit and equity markets diverge,” says Costa.
posted a sharp revenue drop late Tuesday, but as analysts didn’t see their worst fears realized in its forecast on future sales. Services revenue was also a bright spot. Check out our live blog recap.
For Wednesday, Boeing
were rolling out results, with Microsoft
reporting after the close.
Facing an uproar, Facebook
Over 1,000 flights have been canceled stretching up to Thursday as brutally frigid temperatures make it virtually impossible for airlines like United
to get planes off the ground, and crews can’t spend more than a few minutes outside.
We’ll get ADP employment, fourth-quarter GDP and pending home sales today. The Fed announcement is coming at 2 p.m. Eastern, followed by a news conference a half-hour later with Fed Chairman Jerome Powell.
“These extremely cold conditions are life-threatening. Frostbite can occur on exposed skin within 5 minutes.” — That was a tweet from the National Weather Service in Twin Cities, Minn. warning residents to stay inside and off the roads, as wind chills of minus 60 have been reported in some parts of the state. Record low temps from the polar vortex are slamming a chunk of the Midwest is with lots of business and schools shut in Chicago, and even police in Missouri urging criminals to take a day off.
Midnight temperatures & (wind chills):
Rockford: -16° (-43°)
DeKalb: -13° (-42°)
Peru: -11° (-37°)
Chicago O’Hare: -10° (-35°)
Chicago Downtown: -7° (-31°)
Temperatures & wind chills will continue to head down, down, down.
For observations see: https://t.co/BgeKFerhhT
— NWS Chicago (@NWSChicago) January 30, 2019
Northern and northeastern US.
Credit: Thomas Cross pic.twitter.com/zkr1CDTVop
— severe-weather.EU (@severeweatherEU) January 29, 2019
‘Remain in Mexico’ policy gets under way as U.S. asylum seekers forced to wait outside the country
Russian passenger jet arrives in Venezuela, rumor mill gets going
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