Mighty Apple keeps the stock market from breaking

Despite all of the worries about inflation and recession, the stock market dipped again for a couple of days this week, but it didn’t break, thanks in large part to one key indicator, Apple.

Jacob Sonenshine for Barron’s:

The tech behemoth’s shares have held up well recently, and it is a telling signal.
But first, a look at the overall market. The three major U.S. indexes declined Wednesday and Thursday, but the drop wasn’t nearly enough to wash away gains since Nov. 9…
Out of all the stock market indicators, it is worth taking a closer look at Apple.
The first reason is a mere function of arithmetic. The S&P 500’s level is weighted by market capitalization, so stocks with higher market caps have a greater influence on the index’s level. Apple’s roughly $2.4 trillion market cap is about 7% of the S&P 500’s total market value, so if Apple stock performs well, it supports the index.
Secondly, Apple’s sheer size as a company has implications across the technology sector. Its hardware sales, including iPhones, Macs, and iPads are expected to total over $300 billion this year, according to FactSet. Those sales are often an indicator for sales in the broader semiconductor industry…
Finally, one of the most important reasons Apple can act as a market indicator is the reliability of its earnings. They have held up well recently, as iPhone demand remains strong. Services continue to grow as the company has entered newer markets such as digital entertainment and payments, which are taking market share from traditional entertainment and transactions.

MacDailyNews Take: As we wrote yesterday, “Apple’s recent record results are encouraging and the company’s consumer demographics suggest that it could be resilient, even amid inflation. Plus, a very strong profit margin gives the company plenty of flexibility to absorb rising prices should the need arise.”
Apple iPhone customers are the most recession-proof smartphone buyers. — MacDailyNews, September 7, 2022
The same goes for Mac, iPad, Apple Watch, and Apple Services customers in personal computers, tablet computers, smartwatches, and subscriptions, respectively. – MacDailyNews, October 13, 2022
The most inflation- and recession-resistant big tech company is Apple, thanks to its superior customer demographics. – MacDailyNews, October 27, 2022
When your money becomes a greater concern, you want to spend it wisely. In China and everywhere, if it’s not an iPhone, it’s not an iPhone. Further, if it’s not an iPhone Pro, it’s not an iPhone Pro. – MacDailyNews, October 27, 2022
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