As of Friday, March 19, Apple stock was trading just below $120 per share once again. Shares remain about 16% below the all-time peak reached in late January 2021, and sit roughly 10% lower than early September 2020 levels.
Which way will shares head during this last full week of March? The answer will likely depend on a couple of factors, which the Apple Maven highlights below.
Will yields keep climbing?
Lately, Apple has been a victim of a market-wide trend that favors cyclical stocks (think banks, airlines, materials, etc.) to the detriment of high-quality, growth names in sectors like technology.
The rotation out of Apple and its main peers can be explained by expectations for the reopening of the global economies, in a year of recovery from the COVID-19 pandemic. Probably the best gauge of such bullish expectations has been rising interest rates.
Although the Federal Reserve has recently announced that short-term interest rates will remain low for long, the central bank usually has much less of a say about the direction of long-term rates. The 10- and 30-year treasury yields continue to climb at a dizzying pace. The more they do, the more Apple stock and the tech sector tends to suffer.
Keep an eye on yields this week. A pullback or, at least, a much slower increase could be good news for Apple investors.
Will new products be unveiled?
Apple’s next company-specific catalyst will likely be its next product update event. The Cupertino company is widely expected to release a new lineup of iPads, possibly in April. Other products could be in the cards, including new MacBook computers equipped with M1 chips.
iPad and Mac comps will be very hard to top in 2021. Therefore, I believe that a robust product portfolio ahead of the spring and summer seasons will be crucial. Encouraging news on this front, should it come out this week, could be bullish for Apple shares.
Tech battles
Apple has been involved in several fights regarding competitive practices: from the App Store drama with Epic Games to the face-off with Facebook over control of users’ data. Meanwhile, across the pond, the Cupertino company has been under the watchful eye of European authorities over antitrust matters.
It is unclear what else could come out of these disputes this week. Often, “noise” on these fronts is not great news for the stock. Be on the lookout for any new development that could arise.
Twitter speaks
What would you do with Apple today: buy, trade or stay away? Here is what Twitter has to say about it:
Read more from the Apple Maven:
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)
