Investors More Focused on Apple Earnings Than Federal Reserve Meeting

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Investors are concerned about Apple's upcoming earnings report as the company faces a slump in smartphone sales and a decline in revenue for a fourth consecutive quarter. The stock is already struggling, erasing about $460 billion in market value. If Apple shows weakness, it could have a ripple effect on other stocks.

-- A Federal Reserve meeting typically is the stock-market story of the week. Not so this time, however, as investors are more focused on Apple Inc.’s Thursday earnings report than the central bank’s Wednesday interest-rate decision.There’s reason for concern about Apple. The world’s most valuable company, representing 7.2% of the S&P 500 Index, is facing a slump in smartphone sales, and one of its main suppliers is under investigation in China.

Other significant events are also driving global risk. The escalation of the war in the Gaza strip is just beginning, with Israel sending troops and tanks in the area in what it second and longer phase of its fight against Hamas. The fear is that groups backed by Iran will further escalate attacks in the Middle East in response.

However, Amazon.com and Microsoft both rallied in the wake of their earnings, which were both fueled by strong results in their cloud-computing businesses. “I’m concerned about the risk of higher-for-longer rates, which has put a ceiling on investing in Big Tech because there are fears that bigger stock declines are coming,” he said. Beiley used the latest pullback to buy shares of Amazon.com but is still waiting for Apple’s and Alphabet’s multiples drop further.

 

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