T3’s Market Wrap: How Do You Like Dem Apples?


Traders had two questions heading into Apple's (AAPL) Q4 earnings report yesterday after the close:

1) Can the company produce enough iPhone X units?
2) Can the company sell enough iPhone 8 units?

Apple answered both questions with an emphatic yes, proving once again that the Apple supply chain rumor mill can't be trusted.

The media does a great job of sniffing out Apple product announcements, but they're awful at figuring out just how much product the company is selling.

We've been hearing a lot of rumors about weak iPhone demand, and we know now that they had zero basis in reality… not that the bears would admit that.

Apple reported EPS of $2.07, smashing the $1.87 consensus.

Revenue was $52.6 billion, easily beating Wall Street's $50.7 billion forecast.

iPhone units were also above expectations, as was Q1 revenue guidance.

Apple shares hit an all-time high at $174.26 this morning before some minor profit-taking hit.

We still have to see what happens with Nvidia's (NVDA) earnings report on Thursday, but make no mistake: tech earnings season has been nothing short of fantastic.

The October nonfarm payrolls report was released on Friday, revealing that the economy added 261,000 jobs in October, missing the 310,000 Wall Street consensus.

The unemployment rate was 4.1%, besting the 4.2% expected.

However, the big story was Average Hourly earnings, which were unchanged. Economists expected growth of 0.2%.

The numbers point to a strong labor market that isn't generating much wage inflation. Workers are in demand, but pay just isn't going up.

The lack of wage growth means the Fed could continue to undershoot its inflation goals.

The US dollar and Treasury yields fell after the numbers hit, but reversed afterwards.

Gold shot up but dipped back into the red.

This morning, T3 Live Chief Strategic Officer Scott Redler said that “yesterday, SPX broke below 2567 momentarily, and we now have the 2566 low as our new point of reference. As long as that holds, not much changes. 

We didn't come close to that 2566 low, implying that the bull move remains fully intact.

The relentless bid that keeps stock pumped in the face of a chaotic news flow is proving endlessly frustrating to the bears.

Every time there's a sign of trouble — like the recent weakness in the Russell 2000 — it quickly gets reversed and we see new headlines celebrating all-time highs.

Now it seems like the only element left is time.

The market's been zooming higher and higher ever since the Presidential election.

The longer time goes on, the greater probability of an unexpected shock.

But betting against the likelihood of a shock has been the best trade in the market.

The VIX can barely stay above 10, there's almost no intraday movement, let alone run-of-the-mill 5% to 10% drawdowns that used to be fairly common place.

So unless we get some actual technical deterioration in the charts, the only thing the bears can hope for is a shock that comes out of nowhere and destroys faith in the system.

Sooner or later, something bad will happen. It always does.

But good luck predicting when…


Leave a Comment: