A good quarterly report must be nigh, otherwise why would Apple shares rally to a close at record high on Wall Street on Wednesday.
While it doesn’t do it every quarter, it did rally in January ahead of better-than-expected figures for the December quarter (which is the opening three months of Apple’s financial year).
The punters and optimists missed what turned out to be a fabulous March quarter when it was released in April, now they are back and on Wednesday pushed Apple shares to a new closing high of $US144.57.
The 1.8% rise also pushed the company’s market value to more than $US2.4 trillion ($A3.2 trillion).
It was the seventh day in a row Apple shares rose. The close was just below an intraday record of $US145.09, also set in January.
Apple’s recent gains are a sign of growing uncertainty in markets over the past fortnight or so as investors rotate back into tech stocks and away from value shares (which dominate the S&P 500 and the Dow, while techs dominate the Nasdaq).
Apple shares are up 8.95% year to date, well behind the 16% gain in the S&P 500 (Apple is 6.2% of the S&P 500, so if the shares had gained like some of its rivals (Amazon shares are up 13.5%) have this year, the key market measure would have been up 20% or more.
Apple reports its June quarter figures on July 27, so if previous form is any guide, the shares will gain as analysts produce their estimates for the sales (especially of iPhones). China remains a big question mark for Apple, especially given the souring in business relations in recent months, especially against China’s own tech giants (such as didi and Alibaba.
Naturally when Apple shares rise, investors check the performance of its biggest shareholder, warren Buffett’s Berkshire Hathaway. So far this year it’s outperformed its biggest investment and the S&P 500 (which is Buffett’s optimal performance comparison) with a 20% rise – 20.58% to be precise.
Shares in Berkshire’s second biggest investment – Bank of America – are up more than 31% so far this year. Shares in another core Berkshire holding, Amex are up more than 41%.
While these gains help explain some of the performance of Berkshire shares, they also explain the strongly performing US economy – growth requires finance and Bank of America, Amex and some of Berkshire’s other financial holdings are doing very well, as are Berkshire vast industrial holdings in railroads, insurance, real estate, food and grocery distribution, car sales and selling petrol.
