Apple did just fine. But today the stock is falling. I’m not sure why. It’s another lesson: Don’t buy after-hours, though selling last night after hours seemed to make huge sense.
I’m holding my Apple, though I’m down about $12,000 this morning.
Apple dropping strongly, despite its splendid results. Go figure.
TrimTabs says money is coming out of U.S. stockmarkets and going into “global equity mutual funds and ETFs,” setting a record for April. This bodes ill for U.S. stocks.
Tumbling margins in the U.S., maybe?
Morgan Stanley’s Adam Parker doesn’t see any of tumbling margins quite yet.
“For several years now, there has been an increasingly vocal group of investors and academics arguing that US corporate profitability and productivity has peaked,” Parker wrote in a research note on Monday. “We disagree and would point to this quarter’s EPS results as yet another counterexample to what we argue is an over-reliance on irrelevant historical comparisons.”
Parker notes that while profit growth has been exceeding expectations during this earnings season, revenue growth has not. Generally speaking, when earnings growth is outpacing revenue growth, profit margins are actually expanding.
BusinessInsider quotes FactSet’s John Butters:
Overall, 201 companies in the S&P 500 have reported earnings and revenues to date for the first quarter. On the earnings side, 73% of the companies have reported actual EPS above the mean EPS estimate and 27% of the companies have reported actual EPS below the mean EPS estimate … However, on the revenue side, 47% of the companies have reported actual sales above the mean sales estimate and 53% of companies have reported actual sales below the mean sales estimate … Due in part to more companies missing sales estimates than beating sales estimates, the blended sales decline is larger today (-3.5%) compared to the start of the quarter (-2.6%). On the other hand, due in part to more companies beating EPS estimates than missing EPS estimates, the blended earnings decline is smaller today (-2.8%) compared to the start of the quarter (-4.6%).
“That is an impossible combination of data if margins were under pressure!” Parker said. “While the absolute earnings upside largely reflects the ‘beat and guide lower’ that occurred last quarter, the revenue weakness coupled with the large earnings beat relative to consensus is the key to assessing margins.”
For now, says BusinessInsider, it looks like the profit-margin debate will drag on a little while longer.
Some biotech is cratering. Maybe it’s all part of the news buzzwords — “sector rotation”?
I’m confused. I’ll see what my stop loss rule tells me in coming days.
Harry Newton, who extols his most useful gadget — a Fujitsu ScanSnap bulk scanner. Dump a bunch of papers into it and it makes them all into one nice PDF file. It scans doubled-sided paper, but ignores the backside – if it’s blank. Totally brilliant and 100% reliable.
I’m not excited by another heavily down day, especially since I don’t understand quite why.
iPad sales continues to tank. Android cheap tablets are eating their lunch on that one.