Whether trouble ends up finding weary and overstuffed investors at the end of a holiday-shortened week depends on a few factors—oil, trade headlines and perhaps some holiday spending numbers.
And then there is Apple AAPL, -0.11% which fell into a bear market Tuesday, and is in the grips of its worst weekly performance since April 2016. Our call of the day from London Capital Group’s Jasper Lawler says keep an eye on those shares as they near a crucial level.
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“A break through support at $175.00 could see the share price take another big hit,” said Lawler in a note to clients.
He explains that before and after Christmas last year, there was similar talk to now of production cuts and permanently slowing iPhone sales. But that was “glossed over as iPhone prices went up and the bull market carried on,” Lawler said. If Apple falls through $175 now, shares could drop to $140 “with proportionate falls in the S&P 500.”
Scott Redler, chief strategist at T3Live, says while techs have diverged as a group lately, when Apple hits new monthly lows, the rest of the sector sits up and notices. He’s watching $175.50, adding that if that doesn’t hold, there is “no real support to the $160s.”
Last word goes to Michael Kramer, founder of Mott Capital Markets, who is less concerned about Apple than another 800-pound gorilla in the room—the Fed. He points out the market began to pull back on Oct. 3, the same day that Fed Chairman Jerome Powell said we were “‘a long way from neutral’, whatever that means.”
In a blog, Kramer reminds us that Apple still only represents 3.6% of the rest of the S&P 500 and the other 96.4% should be able to pick up the slack if gloomy economic signals start to turn around.
“Should the market continue to sink, it will not be Apple or any one stock that causes the decline. It will be the overly aggressive Fed which is creating the slowing economic growth that sinks the market,” says Kramer.
Plus: The Santa Rally is a big fat fairy tale
The market
Dow YMZ8, -0.61% S&P 500 ESZ8, -0.49% and Nasdaq NQZ8, -0.56% futures are pitching lower. Ahead of the break, stocks notched the worst pre-Thanksgiving run-up in seven years. The Dow erased its gains to finish a smidge lower Wednesday, with the S&P SPX, +0.30% up modestly , while the Nasdaq COMP, +0.92% saw a decent bounce.
The pressure on crude US:CLU8 is unrelenting. The dollar DXY, +0.37% is up, with the pound GBPUSD, -0.4193% pulling back over Brexit deal jitters. Gold US:GCU8 is weaker as well.
Check out the Market Snapshot column for the latest action.
Europe SXXP, +0.22% is creeping higher, but China stocks SHCOMP, -2.49% took a tumble, led by tech stocks with the smaller Shenzhen Composite 399106, -3.66% sliding 3.3%.
The chart
Our chart of the day shows the level of panic over tech stocks lately, as the Nasdaq clings to a 1% gain year-to-date. In its weekly Flow Show report, Bank of America Merrill Lynch said investors pulled $1.5 billion out of tech-focused funds, the biggest amount since February 2015, billion, citing data from EPFR Global. Here’s that chart:
Meanwhile, the bank says its Bull & Bear indicator is nearing a “buy” signal, as it hovers at 2.8. The gauge runs from 0 to 10, with the high end representing extreme bullishness and the low end extreme bearishness. It was sitting at 3.1 last week.
The stat
Getty Images
Bargain hunters swarm Macy’s in New York
$124 billion—That’s how much Americans are expected to spend in online holiday spending for 2018, which would be a record, according to Adobe. Americans have already spent $31.9 billion so far in online sales for November.
Plus: When stores open, the biggest bargains, what not to buy, and our love/hate relationship with Black Friday.
The buzz
Naturally, the big retailers will be in focus this morning as shoppers hit those Black Friday sales—and watch out for updates from Walmart WMT, +0.01% Best Buy BBY, -2.27% Target TGT, +0.33% and Macy’s M, +2.00% on how it’s going so far.
Also in the mix, Amazon AMZN, +1.42% AMZN, +1.42% had a big data breach just days before the kickoff of Black Friday.
A report in The Wall Street Journal said the U.S. has been trying to steer its foreign allies away from doing business with Huawei Technologies over cybersecurity concerns. That comes ahead of Talks between President Donald Trump and Chinese President Xi Jinping at next week’s G-20 summit in Argentina.
Japanese wireless firms are expected to cut prices of the Apple’s cheapest iPhone — the XR, says WSJ.
Tesla TSLA, -2.68% is cutting its Model X and S car prices in China to make them more “affordable” in that country, Reuters reported.
Goldman’s GS, +0.66% former CEO Lloyds Blankfein reportedly met up with a guy at the center of Malaysia’s 1MDB fraud probe and an Abu Dhabi wealth fund is suing the bank over ”fraudulent exposure and losses” related to that scandal.
AT&T T, +1.19% gets to show off its newly acquired WarnerMedia unit Friday with the first-ever pay-per-view golf match—a $9 million showdown between Tiger Woods and Phil Mickelson. Fellow pros seem unimpressed though.
The Markit manufacturing index and services flash indexes will be released this morning.
Read: Mortgage rates slide the fastest in four years, but it may be too late for the housing market
A day after UK Prime Minister Theresa May and the EU were crowing about a deal to lay out the post-Brexit relationship between the two, Spain is threatening to scuttle the big Brexit agreement over the future of Gibraltar.
Random reads
Gunman opens fire at Alabama mall during Black Friday shopping, injuring child
California Camp Fire death toll climbs to 86. One woman said her goodbyes before a miraculous escape
Baby falls on train track in India, survives
Minnesota man fakes death for $2 million life insurance payout
Meanwhile, things boiled over at the Egg Bowl…
"Unsportsmanlike conduct on all players from both teams."
The Egg Bowl got a little heated. pic.twitter.com/APHeah1QRw
— ESPN (@espn) November 23, 2018
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