Stock Price Today (February 17): Updates and Forecast
Futures contracts tied to the major U.S. stock indexes rose in extended trading Monday evening after finishing strong last week, according to CNBC.
Dow futures rose 250 points, suggesting an implied open of about the same magnitude, while S&P 500 contracts added 27 points or 0.7%. Nasdaq 100 futures gained 95 points, also a gain of 0.7%.
The U.S. stock market was closed on Monday for Presidents Day.
Strategists cited a fall in the Cboe Volatility Index, widely viewed as Wall Street’s best fear gauge, for the recent optimism in the markets.
Fundstrat founder Tom Lee said the VIX’s drop below 20 means investors have grown more comfortable in the near term.
“Fear is receding from the market,” Lee, a CNBC contributor, wrote of the move on Friday. “And receding fear is followed by systematic and quant funds adding ‘leverage’ -- in other words, this is a set-up to see a rally.”
Global Stocks Extend Rally
Japan’s Nikkei 225 Stock Average jumped almost 2% to cement a move above 30,000, leading gains in Asia with Hong Kong. U.S. equity futures pointed higher with their European counterparts. U.S. markets were closed for Presidents’ Day on Monday and Chinese markets remained shut for the Lunar New Year holiday, says Bloomberg.
Ten-year Treasury yields jumped above 1.24%, the highest in almost a year, amid this week’s global debt selloff. In the U.S., an Arctic blast threatened to disrupt energy supplies, with crude oil trading around a 13-month high. Elsewhere, Bitcoin reached another record high, coming close to $50,000.
Global equities look set to rise for a twelfth straight session to another all-time high and the Treasury yield curve is around the steepest level in more than five years as traders bet on improving growth. Investors are becoming more confident that a combination of improving inoculation programs and increased fiscal relief will pull the global economy out of the pandemic.
“Continued monetary stimulus and bursts of fiscal support maintain a strong foundation for risk assets, compensating for the slower than expected vaccine rollout,” said Seema Shah, chief strategist at Principal Global Investors.
Is Apple Stock a Buy?
Apple's greatest advantage
Apple has established itself as one of the world's premier brands, and the company has become synonymous with sleek, trendy tech. As a result, Apple's iconic products -- from iPhones and iPads to MacBooks and AirPods -- have mass appeal on a global scale. And that makes it harder for lesser-known companies to compete with this tech titan, Fool cites.
Apple's market opportunity
|Apple Inc. stock price today.|
To put Apple's scale in perspective, the company had 1.65 billion devices in use around the globe as of December 2020. Moreover, the iPhone is the most popular smartphone in North America, and the iPad is the market-leading tablet worldwide. While this makes it harder to generate future growth in those markets, Apple's massive user base is still a valuable asset, and it could be the key that unlocks future opportunities.
In late 2018, Apple shifted its growth strategy to focus on services. At the time that included the App Store, Apple Pay, advertising and cloud services, and certain subscription services like Apple Music. But in the last two years, Apple has released several new products that have dramatically expanded its services ecosystem.
In March 2019 the company partnered with Goldman Sachs and Mastercard to launch the Apple Card credit card. Shortly after, the company announced its new gaming service (Apple Arcade) and a new streaming service (Apple TV+). More recently, in late 2020, the company launched Apple Fitness+, bringing workouts led by professional trainers to Apple's various devices.
Last year, Apple's services revenue was $53.8 billion, accounting for about 20% of total sales. But the company's recent innovation spree is a good sign, and Apple's expanding portfolio of services could be a major growth driver in the future. Moreover, Apple's gross margin on services was 66% in 2020, more than double its product gross margin. In other words, as services account for a bigger portion of total sales, Apple should become increasingly profitable.
Apple's improving performance
Weak iPhone sales in 2019 and pandemic-related headwinds in 2020 caused Apple's sales growth to slow. However, in the first quarter of fiscal 2021 (reported late last month), Apple's growth reaccelerated substantially, driven by a wave of new products.
Apple's performance in the latest quarter showed strength in all product categories. The recent release of the 5G-enabled iPhone 12 family led to a 17% year-over-year jump in iPhone sales. Likewise, Apple's latest M1-powered MacBook models caused Mac sales to surge 21% year over year. And services revenue jumped 24% year over year, driven by strength in App Store sales, advertising, and cloud services.
Investors should be heartened to see Apple's year-over-year sales growth top 20%, and even more excited to see the broad-based strength across all segments. Apple's products are still in high demand, and that's a good sign for the company's future. If Apple can continue to grow its global share of devices, the company's services business should continue to gain traction quickly.
Overheated Stock Market at Risk of Bubble in a Disconnect from Economy
A large segment of the population is untouched financially by the crisis or in better shape. The housing market is strong and those able to work remotely have saved mountains of cash they are using to pump up stock markets, reported by CP24.
Meanwhile, lockdowns have caused major disruptions for workers in the service sector and other parts of the economy that have been forced to rely on government support.
“All the jobs that were lost in the country since the beginning of the crisis -- not some, all -- were in low-paying sectors, low-paying occupations,” says Benjamin Tal, deputy chief economist for CIBC.
North American stock markets have been on a tear since March, setting record highs almost daily even while COVID-19 has battered the economy and produced lackluster employment data.
Some individual stocks have soared amid the froth. Tesla shares are up about 1,160 percent over the past year while Ottawa's Shopify Inc. has risen 425 percent to become Canada's most valuable company by market capitalization.
The S&P/TSX composite is up 65 percent from March 2020 lows and 6.5 percent in February alone. The rebound has been even stronger in the U.S., with the Dow up 73 percent, S&P 500 79.5 percent and the tech-heavy Nasdaq composite up about 113 percent.
Freezing weather in regions across the U.S. sparked another rally in energy futures on Monday and put West Texas Intermediate crude contracts above $60 a barrel for the first time since the early days of the coronavirus pandemic.
In corporate news, CVS Health, Occidental Petroleum, Palantir and others will report earnings on Tuesday.
Executives from Robinhood, Melvin Capital and Citadel are scheduled to testify before the House Financial Services Committee on Thursday. Lawmakers are likely to grill the group on the wild trading in GameStop and other heavily shorted equities.
Earnings to watch this week
The market has begun to focus on the prospects of the economy re-opening mush sooner rather than later. This has led to growth-to-value rotation in stocks such as restaurants, airlines, hospitality, among others, according to Nasdaq.
Meanwhile, upbeat retail data comes at a critical time as the market will get earnings reports from notable retailers. Here are this week’s names I’ll be watching this week when they report earnings:
Baidu (BIDU) - Reports after the close, Wednesday, Feb. 17
Wall Street expects Baidu to earn $2.61 per share on revenue of $4.65 billion. This compares to the year-ago quarter when earnings came to $3.76 per share on revenue of $4.13 billion.
Walmart (WMT) - Reports before the open, Thursday, Feb. 18
Wall Street expects Walmart to earn $1.50 per share on revenue of $148.11 billion. This compares to the year-ago quarter when earnings came to $1.38 per share on revenue of $141.67 billion.
Dropbox (DBX) - Reports after the close, Thursday, Feb. 18
Wall Street expects Dropbox to earn 24 cents per share on revenue of $498.64 million. This compares to the year-ago quarter when earnings were 16 cents per share on revenue of $446 million.
Roku (ROKU) - Reports after the close, Thursday, Feb. 18
Wall Street expects Roku to lose 7 cents per share on revenue of $613.07 million. This compares to the year-ago quarter when the company lost 13 cents per share on revenue of $411.23 million.
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