Stocks can and do move for a variety of reasons. Sometimes it’s worth looking at outperforming moves like this because it may tell us something about investor psychology about a given stock or the overall market.
The market itself has been rather depressed lately, as news of a possible recession keeps rearing its ugly head. In addition, the stock market is at its third highest valuation in history.
The market has also been weighed down by concerns over the ongoing trade war with China, and a generally depressing view of corporate earnings in the aggregate.
As a result, the S&P 500 has been wobbling around in a trading range for a number of weeks, and has only managed a 3 percent bounce off its recent lows.
The rest of the FAANG stocks have each been struggling with problems of their own, and so Apple may have become a flight-to-quality refuge.
Facebook has been pushed around with privacy concerns as of late, and concerns over investigations by the Justice Department into Big Tech.
Amazon has had problems lately, thanks to investigations from the Department of Justice’s antitrust division.
Netflix has taken a big tumble after its last earnings report. The company reported a loss of domestic subscribers for the first time, leading to concerns about increasing competition.
Google’s last earnings report showed some troubling internal metrics, and it is also facing investigations by the Department of Justice on the antitrust side.
While it is true that Apple is caught up in the China trade war, the news that the United States would not raise its tariff rates on certain products until December has given Apple a bit of a respite.
Apple also doesn’t find itself the target of government ire or consumer blowback concerning privacy.
That’s not to say that Apple’s business is necessarily humming along. It is facing innovation struggles. While Apple’s new services division has been doing very well, Tim Cook is no Steve Jobs.
Then again, none of this really should matter, according to Ed Butowsky, Managing Partner of Chapwood Capital Investment Management. He tells CCN.com:
“It isn’t wise to focus on short-term moves in any stock. For that matter, short-term moves in the entire market shouldn’t be focused on, either. the best move an investor can make is to own a broadly diversified portfolio with a minimum time horizon of 10 years, that also contains a significant position in non-– correlated investments (except garbage like bitcoin)”
Last modified: June 23, 2020 2:36 PM UTC