By David Moenning
Chief Investment Strategist, StateoftheMarkets.com
This became a habit last week with Apple (AAPL) trading poorly, Thursday in a strong market and Friday in a weak market. AAPL is expected to report 1st Qtr. earnings on 4/24 after the close. Consensus EPS is at $9.84 and the “whisper number “is $11.31.
But in Thursday’s strong tape AAPL was down about $4.00 to a close at $622.77, well off weekly highs at $644.00. That was not of great concern as AAPL has been showing a tendency recently to weaken into Fridays, but it was unusual on such a strong tape.
On Friday, however, AAPL opened at around $624 and is now trading in the $603-$610 range, which of course could change any minute.
What is going on here?
There were several news items last week which may be affecting the trade:
-GOOG earnings put the spotlight on their more aggressive tablet plans which could possibly have had a carryover effect into today for AAPL.
-Respected, and usually very bullish, analyst Gene Munster of Piper Jaffray put out a note on Friday forecasting 33 million iPhone units for the 1st Qtr., dramatically up from year ago sales at 18.65 million but below 4th Qtr. sales of 37 million
-An announcement out of Germany that a court ruling went against Apple and in favor of Motorola on “push e-mails.”
According to Reuters: “The regional court in the city of Mannheim confirmed an earlier ruling that Apple owes Motorola for using a patented technology that automatically informs Apple customers about their new messages on iPhones, iPods or iPads. A court spokesman said Apple still had to refrain from offering the "push" features in Germany, that it was liable for damages and was ordered to provide information to calculate the amount of damages.”
-Continued chatter about the Dept. of Justice announcement at the beginning of last week about going after AAPL and e-book publishers on “price-rigging”, which reportedly AAPL will fight.
-And then, on a more positive note, according to a tech blog:
“With an air of mystery and few details, a French designer says he's been working on a project with Apple that will produce a "revolutionary" product in eight months. French designer Philippe Starckis claiming that he's teamed up with the company to cook up a new product, the results of which will surface by year's end.”
Speculation on this is all over the place, with equal support for a television and also for a wholly redesigned iPhone.
Despite all this news, somehow we have a sneaking suspicion that they are running the stock down prior to running it back up into earnings. But there is little doubt this has been one of the weaker short-term periods for AAPL, with what is looking like the first 4-day retreat in the stock seen this year.
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