If the dollar is tied to your investment case, then best keep a beady eye on the chaos bubbling over across the Atlantic.
The British pound is getting mauled against the buck and other big rivals on news U.K. Prime Minister Theresa May’s Brexit minister has quit, with others expected to trot after him out the door. In short, that is the guy she didn’t want to lose and throws the whole deal and even her government into question.
So the U.K. has breakup issues, well the U.S. has its own problems too, right? The Dow is in the grips of the worst losing streak in three months, and Apple is teasing a bear market after an analyst downgrade, which piles on target cuts from Goldman and UBS and before that, supplier warnings (another one crept out late Wednesday—see Buzz).
Our call of the day offers a spark of hope for investors who may feel let down by the company that is a key proxy for Wall Street momentum.
“The good news after the bell was that David Tepper is back in the stock,” wrote the guy behind the Heisenberg Report blog. He’s referring to 13F data that filtered out late Wednesday, and shows what the hedge funds and other big investment groups have been up to in the third quarter, including Tepper’s Appaloosa Management.
“Back in Q1, he unloaded his entire stake in the company (worth some $776 million at the time), and used the cash to buy the Panthers. Warren Buffett was buying back then and he’s still buying now. Berkshire boosted its stake in Apple in Q3,” noted Heisenberg.
But then he also noted that Tepper cut Facebook, which is the subject an unflattering NYT expose (see Buzz), and Alibaba BABA, +2.35% —”not exactly a vote of confidence for two of the other names that comprise the world’s most crowded trade.”
And it has to be said that funds that loaded up on Apple did so before shares really got ugly. Fidelity, J.P. Morgan, Janus, Tiger Global Management and Coatue Management are other names that also piled on Apple holdings. So when the next set of 13Fs roll out, we’ll see who the fair-weather friends are.
Judging by premarket action, Apple may be ready to claw back some territory. Last word goes to Paul Theron, chief executive officer of equities at the Johannesburg asset manager Vestact, who has been keeping a cool head about one of his favorite stocks.
“The current moves are irrelevant to the long term investment case. In fact the lower price makes them more attractive,” says Theron.
Check out: Billionaire investor Steve Cohen sees a bear market heading our way
The market
Dow YMZ8, +0.30% S&P 500 ESZ8, +0.26% and Nasdaq NQZ8, +0.55% futures are up. That’s after Wednesday’s action, which saw the Dow DJIA, -0.81% log its fourth-straight loss, with the S&P SPX, -0.76% and Nasdaq COMP, -0.90% under pressure.
Gold US:GCU8 is edging up, and crude US:CLU8 is mostly steady, while the dollar DXY, +0.13% is getting a Brexit boost (see chart of the day).
Check out the Market Snapshot column for the latest action.
Europe SXXP, -0.46% stocks are getting dragged down by banks (yep, Brexit worries) and China stocks SHCOMP, +1.36% gained, in a mostly up day for Asia.
Bitcoin BTCUSD, -2.41% is down another 12%, after crashing through $6,000 on Wednesday.
The chart
It’s all about the British pound, which has careened down to levels not seen since the end of October as Brexit Secretary Dominic Raab’s resignation has scared the jeepers out of investors. Here’s what the pound did after that news came out early in London’s day.
“One big name resignation, that of Dominic Raab, is worrying, but there is the possibility that May, the great survivor, could limp on. There are, at present, too many moving parts to guess whether the deal can still get through,” says Chris Beauchamp, chief market analyst at IG.
The Twitter universe is on the case:
BREAKING! #Brexit Minister #Raab has resigned! pic.twitter.com/mY88Mnd9uG
— jeroen blokland (@jsblokland) November 15, 2018
The buzz
Walmart WMT, -1.37% has delivered an earnings beat will report ahead of the open, and the pressure is on for the retailer to dazzle with its e-commerce operations. Cisco CSCO, -1.75% rose after its upbeat results. Nvidia NVDA, -1.06% and Nordstrom JWN, -4.40% are coming after the close.
Austrian chip maker and supplier AMS AG AMS, +3.73% cut its outlook and that is been linked to its big customer Apple, though shares are flying in Zurich.
Speaking of Walmart, Warren Buffett’s Berkshire Hathaway completely got out of Walmart in the third quarter.
Facebook FB, +1.45% is trading lower. A bombshell New York Times report says the social- media site used a political-opposition-research group to link its critics to billionaire George Soros last summer.
American Airlines AAL, +0.87% says it was “unaware” of some functions of the Boeing 737 MAX—linked to the deadly Lion Air crash—until recently.
WeChat-operator Tencent 0700, +5.80% surged in China on a 30% profit jump.
The economy
It’s a huge data day, with weekly jobless claims, retail sales, the Philly and Empire state indexes and import prices, followed by business inventories.
We also heard from Fed Chairman Jerome Powell after the close, who said he’s “very happy” about U.S. economy, but could see some headwinds over the pace of interest rates and how high they could go.
Random reads
Saudi Arabia seeking death penalty over killing of Jamal Khashoggi
Stormy Daniels’s lawyer has been arrested over allegations of domestic violence
Teens are boiling sanitary pads to get high
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