This year began on a terrible note for Apple’s (AAPL) investors as its CEO, Tim Cook, made a downward revision to its fiscal 2019 first-quarter guidance in a letter to investors on January 2. The news triggered a massive sell-off in AAPL, which fell 10.0% on January 3.
Apple’s loyal consumer base soon made investors confident about Apple’s ability to maintain financial growth, which helped its stock end the first quarter with a 20.4% gain compared to the 13.1% and 16.5% gains in the S&P 500 Index and the NASDAQ Composite Index, respectively.
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HSBC downgrades Apple
According to Thomson Reuters, HSBC (HSBC) downgraded its recommendation on Apple stock to a “reduce” from a “hold” on April 10. In contrast, the bank raised its 12-month price target on Apple to $180 from $160. At the end of the day on April 9, Apple stock was trading at $199.50, nearly 10.8% higher than HSBC’s new price target.
HSBC’s downgrade on Apple comes at a time when its stock has rallied in nine out of the last ten sessions.
At the end of February 2019, AAPL made up ~9.61% and 3.34% of the Invesco QQQ Trust, Series 1 ETF (QQQ) and the SPDR S&P 500 ETF (SPY), respectively.
Is a trend reversal possible?
After the recent rally in Apple stock, some of its key technical indicators are showcasing signs of a possible reversal in its price trend. Its 14-day RSI (relative strength index) is hovering near 74.6, near overbought territory, with a divergence from its recent price action. Note that an RSI indicator’s divergence from a stock’s price action could act as an early sign of a possible reversal.
Apple stock’s 50-day simple moving average is hovering well below its 200-day simple moving average, reflecting weakness in its medium-term price trend.
Apple is scheduled to release its fiscal 2019 second-quarter earnings results on April 30. Concerns about the company’s falling iPhone sales could continue to haunt investors ahead of the company’s second-quarter earnings event, which could keep its stock mixed to negative in the coming weeks.
Wendy’s (WEN) stock was flat in early morning trading on April 10. YTD (year-to-date), the stock has risen 15.2% as of April 9.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.