Market Wrap-Up for Apr.24 (AAPL, YUM, BA, PG, TUP, AMGN, more)

Today was all about the reaction to Apple’s (AAPL) earnings from the overnight and the huge basket of other widely-owned names that reported earnings results as well.

I will have more on Apple below, but we did see large swings in the stock’s price intraday, only to see shares close slightly lower. As for some of today’s earnings winners, we had shares of Yum! Brands (YUM) shrug off bird flu fears, Broadcom (BRCM) shrug off potential Apple supply slowdown, Wellpoint (WLP) ramping on 16% revenue growth as health care cost inflation zooms higher, General Dynamics (GD) jumping despite fears of military budget cut effects, and finally Boeing (BA) (no 787, no problem!).

On the downside, we saw plenty of selling in names like Amgen (AMGN) (stock had been ramping along with most large biotech names as of late), AT&T (T) (victim of Apple momentum slowdown), and Procter & Gamble (PG) (trading with way too much momentum for a slow grower). Others dropping following earnings results include T.Rowe Price (TROW), Tupperware (TUP), Eli Lilly (LLY), and Wyndham Worldwide (WYN).

Apple Shares Will be Grinding it Out

Well, the much anticipated earnings report came out from tech giant Apple (AAPL) last night, and just like we saw with Google (GOOG) and Netflix (NFLX), the immediate reaction was to spike higher. Unfortunately, as the earnings call went on, Apple’s CEO Tim Cook talked about slowing growth, and noted that next quarter didn’t look too exciting. Immediately, the near $25 after-hours gain began to recede. For traders that jumped on the initial headlines and chased the stock higher, many were caught off guard on news of what business would be like going forward. The company did hike its dividend payout nicely (+15%) and also announced an enormous share buyback program ($50 billion on top of existing $10 billion). However, the pop the company had in recent years was a result of growth-seeking momentum investors. Once that crowd turns and looks for the next story, gravity takes over, and the much-beloved name is replaced with tomorrow’s next big growth story.

As we sit here and watch Apple shift up and down, a changing of the guard will likely soon occur, where value players will begin putting the company on their radar. With a ton of cash and a potential to innovate over time, plenty of arguments will be made to why the shares make sense at particular price points. Can Apple find its old mojo? Certainly anything is possible, but they will need to do a lot to regain the momo (momentum) crowd that loves to salivate over tomorrow’s best growth stories. In the meantime, Apple shares will likely be waiting for the the estimate cuts and price target revisions to get through the system first, before we get a sense of where the market sees fair value in the near term based on muted growth expectations.

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Thanks for reading everybody. I’ll see you tomorrow!

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