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Buying On Iran, Ignoring Apple Please click here for a chart of Apple Inc (NASDAQ: AAPL).
Note the following:
- The Morning Capsule is about the big picture, not an individual stock. The chart of AAPL stock is being used to illustrate the point.
- This morning investors are aggressively buying stocks on no military response from Iran or its proxies over the weekend to Israeli actions in Gaza.
- Investors are ignoring the potential bad news on Apple. Apple is the largest stock and carries a very heavy weight in the indexes.
- There are reports that many Chinese are abandoning iPhones in favor of Huawei’s Mate 60 Pro.
- The chart shows when the Morning Capsule read,
Another challenge to Apple is a chip breakthrough in China leading to Huawei Mate 60 Pro. Previously due to the U.S. chip sanctions, Huawei was not able to produce a 5G phone. In a breakthrough, Semiconductor Manufacturing International, aka SMIC, a Chinese state-owned chip manufacturer was able to produce an advanced chip. Before the U.S. ban, Huawei had 12% of the smartphone market globally. Especially in China, the ban benefited Apple. The U.S. government is concerned and investigating how Huawei was able to produce such an advanced phone. This is an important subject for investors.
- As a member of The Arora Report, you have had an advanced notice of Apple’s trouble in China through various posts.
- China is also targeting Apple’s largest supplier Foxconn with tax audits and land use audits. Foxconn is the main assembler of iPhones.
- The chart shows that after the iPhone 15 release, attempts to break above the top band of the support/resistance zone have failed.
- The chart shows that AAPL stock is currently below the low band of the support/resistance zone.
- The chart shows that members of The Arora Report were able to buy AAPL stock last year at a lucrative price when it dipped in the Arora buy zone.
- Why are investors ignoring the news from China regarding Apple? In The Arora Report analysis, the reason appears to be that the impact will be felt in the current quarter and not in the last quarter.
- Apple will report earnings later this week for the last quarter.
- Good earnings from McDonald's Corp (NYSE: MCD) have brought in more buying. MCD is a member of Dow Jones Industrial Average.
- As an actionable item, the sum total of the foregoing is in the protection band, which strikes the optimum balance between various crosscurrents. Please scroll down to see the protection band.
Bank Of Japan We have been sharing with you that the Bank of Japan’s (BOJ) actions are very important to the U.S. stock market for two reasons.
- Many funds have been borrowing in yen at very low rates and investing in the U.S. stock market.
- Japanese institutions are big holders of U.S. Treasury bonds.
The Bank of Japan will announce its decision tonight. There is no consensus. Opinions range from BOJ doing nothing to BOJ completely abandoning its yield curve control policy.
Fed The FOMC meeting starts tomorrow. The rate decision will be announced on Wednesday at 2pm ET followed by Powell’s press conference at 2:30pm ET.
Magnificent Seven Money Flows In the early trade, money flows are positive in Apple Inc, Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc Class C (NASDAQ: GOOG), Meta Platforms Inc (NASDAQ: META), Microsoft Corp (NASDAQ: MSFT), NVIDIA Corp (NASDAQ: NVDA), and Tesla Inc (NASDAQ: TSLA).
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (ARCA:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is aggressively buying stocks in the early trade. Smart money is