Let's Talk AAPL

Equities start the day lower but who cares about the stock market, let’s talk AAPL. Now if you’ve been following me the past few years you know I’m King AAPL #1 fan-boy stand in line get made fun of consumer of all things Steve Jobs. People at work literally come to my desk during AAPL events and ask me if I’m ok, if I need to lay down. So after yesterday’s presentation let me relay a few thoughts.  1) I will never buy the current version of the watch. Its big, chunky, probably gets 8 hrs of battery life, looks a bit too geeky and let’s face it, no one needs another thing to charge overnight. I’m sick of charging things. Enough already. If I have to charge another item I’m quitting this world and moving to an island.  2) I have no idea whether to get the 4.7” or 5.5” iPhone. I realize I’m going to look like an absolute idiot pulling a waffle out of my pocket and using it at a bar but the thing is calling to me with a siren song. Isn’t the biggest thing supposed to be the best? This is America right? 3) The biggest announcement, in terms of the stock price, is this “Apple Pay” thing. Our kids will look back one day and mock us for pulling a piece of plastic out of our pocket to pay for things. Remember Travelers checks? Those are credit cards in 2014. AAPL didn’t invent mobile payments, and they certainly aren’t pioneering some new technology here, what they are doing is bringing critical mass (800mm iTunes accts) to an nascent technology that needs a reason to advance. How can we not own PAY here?  They showed their freaking terminal during the event! Anyway, AAPL brought it old school yesterday, they would’ve made Steve Jobs proud. Now someone please tell me not to buy the 5.5” phone. (if you wanna see them to scale, print this out)

After the open we saw a bit of follow thru from yesterday’s random weakness (there was no specific reason for it to be down), but most of the losses were erased by lunch. There hasn’t been any economic data the past two sessions so I don’t have a random data point I can use to prove an untested conclusion (I’m good at that, maybe the best). PAY did indeed RIP today soaring 6.5% as people start to price in mobile payment growth.  Apparently there are only 220k merchant sale locations that accept NFC out of 8 million opportunities. How nice will it be to pay for those Doritos with your phone? Cash is dead. Who uses cash anymore?  What a dumb relic. We may not have hoverboards yet but the future is here people! Oh and PAY is in the S&P400, not the 500. If it gets the lion’s share of these NFC terminals wouldn’t it be a candidate for the major leagues? Inquiring minds wonder (we don’t cover PAY at Baird). What else rose? GRMN, ADS, AAPL, and LUV. Apparently the watch isn’t a Garmin killer, ADS is getting involved in some gaming program with GME, AAPL is gonna sell 2.8B phones plus some ugly watches, and LUV made their planes bluer. Who knew changing the color of your planes meant a higher stock price? Nice job consultants. By lunch we were threatening to retake 2,000 like it was a French town in the summer of ‘44. 

The rally kept going all afternoon and by the time the bell rang we closed on 1,995, the year I graduated college. I don’t know, frankly there isn’t a lot of rhyme or reason to price action over the past few sessions. Lots of drifting around, admittedly with a negative bias, but still feels aimless. What’s on the horizon?   More economic data, another Fed meeting on Sep 17, and a punishing Bears loss to the Niners this weekend. Oh well, I just want them to beat the Packers. Is that too much to ask? 

Final Score:  Dow +32bps, S&P500 +36bps, Nasdaq +81bps, Rus2k +56bps.

News Highlights:

Couldn’t find much out there that wasn’t AAPL related so we’re going to skip to the big finish.

Did I mention AAPL yet? No? How about we look at an awesome parody video of the new Watch!


Have a good night.