Did Apple almost single-handedly save Wall Street’s current bear rally on Friday?
While Elon Musk was sacking executives and others at Twitter, and shredding the $44 billion he borrowed or put up with mates to buy the social media platform and tech majors lost around $US1 trillion dollars over the week, Apple shares rose 7.6% on Friday, leading the market to a surprise gain for the day to close out a big week.
The Dow closed Friday up a massive 828.52 points, or about 2.6%, higher at 32,861.80 at Friday’s close. The S&P 500 added nearly 2.5%, to end the week at 3,901.06. The Nasdaq ended up about 2.9% and closed at 11,102.45.
On a weekly basis, the major indexes made big gains. It was the fourth positive week in a row for the Dow, a first since a five-week streak ending in November 2021.
The 30-blue chip index was up 5.7% last week in its best performance since May. It’s also on track for its best month since January 1976.
The S&P 500 and the Nasdaq are up 3.9% and 2.2%, respectively, last week.
Apple’s strong performance contrasted to the mayhem at Twitter where Musk sacked three top executives, who will be paid $US187 million (at least) in compensation and readied himself to sacking hundreds more this week. Some reports said the axes started falling on Saturday.
Musk’s Tesla shares rose more than 6% last week, cutting October’s loss to 13.8% so far (in the strongest October for decades), even though it is clear the EV giant is finding competition tougher in China because of the rise of BYD.
But Tesla shares have lost more than $US10 billion for far in October, which is probably a good read by the market on its prospects and Musk’s erratic performance
Apple, on the other hand, has added more than $US500 billion so far this month.
Apple’s performance on Friday has also kept the Dow on track for the best ever October on record (and remember October is a month for market explosions in 1929 and 1987 for example)
If investors maintain their appetite for the Apple shares through to the end of December, it will be the second time in two years that the iPhone giant has driven Wall Street higher to big gains. Apple added more than $US600 billion in value in the final three months of 2021.
With those big gains, futures trading for the ASX 200 saw a 92-point gain by the close Saturday morning, Sydney time.
After Friday’s 0.87% loss here on Friday, it’s the second week in a row that Wall Street will give the local market a push higher at the start of a new week.
Apple shares added more than $US150 billion in the single biggest day’s trading for the company – lifting its market cap back above $US2.5 trillion for the first time since August.
Turnover on the day was more than 165 million shares – the biggest for 11 months as investors chased the shares all day after the iPhone maker’s revenue and profit both topped analysts’ estimates.
The other megacaps including Microsoft, Alphabet, Meta and Amazon saw their shares tumble after reporting results this week, shedding $US477 billion in combined market value in the trading session immediately after the results last week.
Netflix saw its shares rise again, albeit by just 2% – but that took the rise since the strong quarterly results two weeks ago to 25%. That stands in stark contrast to the disaster known as Meta Platforms which saw its share price fall more than 23% last week alone.
The Financial Times put the losses at $US1 trillion last week and yet the overall gain on Friday was stunning, especially after the big Amazon selloff on Thursday in afterhours trading after its 4th quarter revenue forecast fell far short of market forecasts.
That the Dow (for value investors) and the Nasdaq (for tech punters) rose strongly on Friday and over last week, suggests investors haven’t worked out just which sector or sectors will benefit, even though there’s a rate rise ahead on Thursday morning, Sydney time and those expected strong comments from Fed chair, Jay Powell.
One investor will be laughing – Warren Buffett – his Berkshire Hathaway is the largest single investor in Apple and the gain so far this month (since the company’s September 30 balance date), will set him up for a solid 4th quarter. Berkshire shares have risen less than 1% for the year so far, the S&P 500 is down more than 18%.
Apple shares were up 5.6% last week and are facing a gain for October of more than 12%, subject to trading tonight.
Earlier on Friday, Amazon fell as much as 12% to briefly dip below $US1 trillion in market value, as the e-commerce and cloud computing company joined Microsoft in providing weak updates to its cloud business — fast-growing divisions for both tech giants. Amazon shares lost 7.5% by the close Friday to be worth just over $US1 trillion. That took for fall for the week to 13.3% and 8.5% for the month so far.
According to Peter Garnry, head of equity strategy at Saxo Bank.
“Apple’s performance the past year with a cost-of-living crisis, supply chain constraints and soaring input costs has been phenomenal and last night’s result confirms that Apple is a fortress that can withstand the volatile environment,” he said on Friday in the US.
Investors everywhere are hoping this remains the case for a second 4th quarter in a row.
