- Apple stock falls sharply after the US CPI print.
- Equities go into freefall, but Apple gets targeted aggressively.
- Nasdaq closes down 5%, but Apple is down 6%.
It is difficult to write about an individual stock performance after a day such as Tuesday. Equities were routed after a higher-than-expected CPI report led to a repricing of risk assets and interest rate expectations. Apple (AAPL) probably also suffered as it was one of the better stand-out performers, so profits were there to be taken on an otherwise dismal day.
Apple stock news
Apple stock finished at $153.84 for a loss of just under 6%. This was worse than the performance of the main market indices. Also of note was the performance of the Nasdaq 100. For starters, the 100 is a bit of a misnomer, as there are 102 stocks in the index. On Tuesday all 102 of them closed lower, so clearly this was about overall sentiment.
Apple performed well on Monday as analysts and investors reacted positively to the new iPhone 14 launch. Wedbush has written a positive note to clients saying orders were tracking well and customers were tending to go for higher spec models. That means higher margins. Social media has been less kind with many criticizing the lack of substantive new features versus the iPhone 13. The fact remains that with higher prices outside the US, it will be hard for Apple to hit sales targets in my view. Consumption is set to be scaled back.
Deutsche Bank was out with a note before the CPI data saying inflation was now increasingly demand-driven. That can be a good thing as the Fed can fight demand with higher interest rates, but hitting demand is bad for corporate earnings. Added to this is the dollar headwind. About a third of S&P 500 companies’ revenues are derived from overseas and so will be affected by dollar strength. Tuesday’s CPI will add to that strength. I remain with my $100 12-month price target, which you can read more of here: Apple Stock Deep Dive: AAPL price target at $100 on falling 2023 revenues.
Apple stock forecast
With all this blind panic, we should just remind ourselves we are back to where we were on Friday. Apple rose 4% on Monday as iPhone 14 enthusiasm took over, so now this is just a neat pullback. Technically, we are once again on the 50% Fibonacci retracement of the largest 35% summer rally. $150 is the next support level and then will probably see a move to test the early June lows at $129. There is a long way to go, and this year is nothing if not choppy, so I expect more of the same. $150 is the pivot below. Above and we are in for more choppy trading
Apple daily stock chart
