$AAPL Hits 1 Trillion Valuation
Equities start the day lower because we couldn’t possibly go more than 3 or 4 days without Trade War bluster. China vowed that it won’t back down after Trump’s latest threats and that was enough to crush futures for 50bps. If you are looking for things that are sitting on the tape like Grimace on a pile of cheeseburgers then trade war talk is your jam. Earnings could be the best in history, Tom Cruise could make Top Gun 2 and 3, TSLA could come out and say “we’re going to make $100B next year while re-inventing the entire electrical grid”, Taco Bell could offer liquid cheese intravenously, FDX and UPS could say “the economy is in a golden age and we need 20k more workers to keep up with demand” yet if Trump and China were going at it on Twitter, S&P futures would be lower. I’m so tired of it, make it stop. Speaking of TSLA, they reported earnings last night and Elon Musk struck a much more amicable tone which the market loved (was up 11% after the bell). What is it about TSLA? Why do so many people lose their minds over this thing? JCP and Sears can sit there and rot for decades, causing huge urban blight, yet Bears say TSLA is going bankrupt this year. Here’s a hot take: Bulls read the headlines, Bears read the balance sheet, and Pragmatists watch the trading range. This stock has gone nowhere for 2 years, everybody relax, have a cream soda (can you name the movie?). Hopefully we can get thru today without too much damage because the setup is there for new highs. 379 companies have reported with 10% top line growth and 25% bottom line growth….that’s just fantastic.
After the open we watched every single tick of $AAPL waiting for it to hit $207.05, the magic level where it would be worth $1 trillion. I mean if we had to measure the dead weight economic loss of thousands of people in finance watching every print of Apple stock it would’ve competed with England’s World Cup matches. At 11:48am ET 5,636 shares traded at 207.05 and one of the greatest stories in HISTORY opened a new chapter. This is a company that was started in a garage on April 1, 1976, in the great state of California, in the most dynamic nation on the planet, from SCRATCH, and hit a valuation of $1 trillion on Aug 2, 2018. You live in remarkable times my friend, in your pocket is the knowledge of the world, the ability to never get lost, an entire library of every movie ever made, countless videos and pictures of your life, and your spouse texting you “WHY DON’T YOU ANSWER THE PHONE” nonstop. What’s the true value of an iPhone? $5k? more? TSLA punished shorts to the tune of 16% and I’d be in dereliction of duty if I didn’t point out that my guy Ben Kallo is really good in this name. Other winners CF, SONO (IPO today), PKI, REGN, and ZTS. Losers were APRN, a company that IPO’d last year at $10 and is now trading sub $2, TRIP -11%, WLTW -8%, UNM -7%, and Brookstone, one of the last great mall stores who filed for Chapter 11. Where am I going to get my Newtown Cradle desk toy and foot massagers now? Sigh. By lunch we had actually forgotten about Trade War bluster and sat well off the lows, 2,824 +0.40%.
We actually rallied the rest of the day with fan favorites like FB, AMZN, NFLX, and AAPL leading the way. We went out on the highs 2,828, up 0.53% with the notion of Growth ----> Value dying after only 3 sessions. Just an absolutely incredible rally off the lows, today was an A+ from a price action perspective. It’s possible that the overnight low due to trade bluster was the last gasp of that particular catalyst mattering but I guess only time will tell. I have a pet theory that “Trade war” risks are asymmetric to the upside and maybe, just maybe, I was proven right. Final Score: Dow -3bps, S&P500 +49bps, Nasdaq +124bps, Rusk2k +77bps
Volume was average. News Highlights:
- Succinct Summation of the Day’s Events: Started off in the gutter due to trade war nonsense, rallied all session long on the back of TSLA and AAPL and the fact that the mkt is tired of the China v US thing.
- 8 way to improve yourself (h/t @ritholtz)
- Guess what? You and I both have something in common with Charlie Sheen, we are all in a financial crisis!! The actor claims he’s had a “significant reduction” in his earnings, and is in a “dire financial crisis” with less than $10 million to his name.
- TV is dead, no one watches TV anymore. It’s over, move on
- Also this is the worst idea in TV history
- Tim Duy out with his latest Fed update. Guy is a genius Fedwatcher: Bottom Line: For now, the economy continues to grow at a pace that allows the Fed to stick with the path of gradual rate increases. Powell & Co. would like to see evidence that the economy is stabilizing at a more moderate pace of growth before entering into a period of extended pause. That evidence has not yet materialized, but we can tell a story in which it does materialize by the end of this year or early next year. Until it does, expect the Fed to keep the pressure on the breaks.
- Let’s make this on Sat for breakfast
- How amazing would a hike be near that beach?
- Kids are getting news from Flop accounts now. Get educated on it here: Naturally, they’ve turned to Instagram. Specifically, they’ve turned to “flop” accounts—pages that are collectively managed by several teens, many of them devoted to discussions of hot-button topics: gun control, abortion, immigration, President Donald Trump, LGBTQ issues, YouTubers, breaking news, viral memes.
- I find this fascinating, 3 Levels of Wealth: Butterfield’s three levels of wealth aren’t all-inclusive but I like the fact that he frames them in personal finance terms people can understand. It’s a tad depressing that we now have so many people reaching the top level but so many others who struggle to reach the first level of wealth. Level 1. I’m not stressed out about debt. Level 2. I don’t care what stuff costs in restaurants. Level 3. I don’t care what a vacation costs.
I’m going to end tonight on a video near and dear to my heart. When the guy says “I want to ride a park bench in the shade” I absolutely die laughing. Disney Dad y’all
Have a good night