WASHINGTON, March 21, 2017 – Stocks have been looking toppy for the longest time. But trading action late Tuesday morning is driving that point home, big time. As we near the noon hour ET, the Dow Jones Industrials are off 197.10 (-0.94 percent, the broader-based S&P 500 is down 23.89 (-0.88 percent) and the tech-heavy NASDAQ is getting walloped to the tune of a negative 78.78 (-1.31 percent).
The financial sector—banks, insurance companies and the like—is one of this morning’s primary casualties. Eager bears are selling these shares reportedly due to the fact that, in spite of the Fed’s recently announced 0.25 percent interest rate hike, which should help bank earnings, prevailing rates in the market (bonds, etc.) have pulled back a bit even though Fed rate hikes should still help banks and insurance companies in the long run. Problem is, everyone seems to want results yesterday.
Even the lately-mighty Apple (symbol: AAPL) is off fractionally as we write this, despite its surprise new product offerings announced today—mainly a showy new pair of red aluminum iPhone 7 and iPhone Plus models, set to arrive in stores this Friday, as well as a new version of its 9.7-inch iPad.
Why is Apple seeing red? While the company’s balance sheet is still a sea of green, its new red iPhone is being introduced for more symbolic reasons, namely to draw increased attention to Apple’s ongoing (RED) Campaign, which has contributed to the Global Fund to Fight AIDS for many years.
Apple’s new $329 iPad model is a notable step up, running iOS 10 on an A9 chip and boasting TouchID, worldwide LTE access and a brighter, improved display.
The company also announced “Clips,” a brand new free app that might be at least mildly seductive for rabid Snapchat fans. The new app, to be available in April, allows users to combine photos, music and video clips for sharing across social media. Clips is also supposed to make available assortments of shapes, emojis and “artistic filters.” Sound familiar? Should Snap, Inc. (SNAP) be quaking in its boots? Probably not, even though its description hints broadly at incorporating features popular in Snapchat, Instagram, Google Photos and other existing apps.
Other brief product announcements were also made by the company, though they involve largely minor, cosmetic matters. However, Apple is apparently pushing its “Swift Playgrounds” app for the learn-to-code crowds here and abroad, releasing versions in Chinese, Japanese, French, German and South-of-the-U.S. border Spanish.
With regard to Apple’s stock price, after its recent, surprisingly vigorous run after what seemed like a year of nothingness, it’s probably time for these shares to take a breather and allow analysts to keep cranking their price targets up on the stock. High estimates now price AAPL at $155, which price should (according to analysts) be achieved later this year.
Otherwise, it’s a pretty lousy day on Wall Street, save for fans of gold, whose beloved yellow metal has been doing nicely over the last couple of days after getting smithereened for the better part of the past 2-3 weeks.
It’s uncertain how long this most-recent recovery in the metal will last, as the usual invisible armada of sellers seem likely to show up again as they always do when they think gold is getting too big for its britches (as far as they’re concerned). That’s the hard part about investing in physical gold, paper gold (via ETFs) and gold mining stocks. A positive financial story can make you a nice profit in this sector. But you never know when those shadowy, very-likely state-run bear attacks are going to occur, and when they do, the downdraft can be breathtakingly violent.
Many investment gurus tell you you should always have some gold (and/or silver) in your portfolio as a hedge. But acquiring these metals or their proxies in such a way as to blunt these periodic big bear raids is an imperfect art and not a science. Aside from speculating in this area, we rarely, if ever invest in it for the long term. Too dangerous.
Better luck for all of us tomorrow.