Apple’s quarterly results will dominate markets in the US and around the world this week with a lot at stake – including its continuing role as America’s (and the world’s) most valuable listed company, not to mention the impact of the report on fragile investor sentiment.
Apple will be one of nearly 140 companies in the S&P 500 reporting this week (it’s the company’s 4th and final quarter for the 2017-18 financial year).
It reports on Thursday and two days before Facebook reports its third quarter but that will have no big impact on investor confidence – unless it is a terrible set of figures.
Last week Apple retained the top position in the flood of quarterly reports that ended up seeing a changing of the guard in positions two and three among the most valuable US listed groups.
That change saw Microsoft regain its spot as America’s second most valuable company on Friday as Amazon shares tanked in the wake of disappointing third-quarter forecasts that saw $US65 billion wiped from the market value of the online retailer making the amount lost in the past six weeks around $US200 billion.
Amazon shares slumped 7.8% on Friday after its third-quarter results Thursday after trading had ended. Microsoft shares fell 1.2% in what was another tech sector sell-off on Friday driven by the weaker-than-expected report from Google-parent Alphabet and Amazon.
That saw the Nasdaq composite index down 2.1% on the day and 3.8% for the week.
Microsoft’s market value ended at $821 billion and $US20 billion above Amazon’s valuation for the first time since April, when it gave up its spot as the second largest company by market capitalisation.
Apple still tops the list at $1.05 trillion after crossing that threshold in September. Many analysts reckon Microsoft will follow Apple over the trillion dollar level (it needs a share price of just of $US130 for that against Friday’s close of $US106.96).
Amazon briefly drifted over the trillion-dollar level in a couple of trades in early September but retreated and the shares have been heading south ever since. Apple achieved the trillion valuation in August and it will be under pressure this week.
Apple shares are down only 4.4% in the last month against the 8.7% slide in the S&P 500. Apple shares are up more than 27% so far this year against a half a percent dip for the S&P.
The resilience of Apple’s share price is keeping the index out of plunging deep into correction territory and wracking up big losses for the year to date.
Amazon shares have sold off and are down 18% in the past month (6.8% last week), Microsoft shares are down more than 6%, Apple shares by only 4.1%.
Microsoft was America’s most valuable company from late 1998 through early 2000 before the dot-com bubble burst.
Amazon’s shares 7.8% drop on Friday was the largest in three years after its holiday season sales outlook missed targets, raising concerns that Wall Street’s tech darlings are finally starting to face stronger competition.
Among those reporting this week will be Mondelez, Genworth, AIG, Yum Brands, Coca-Cola Co, eBay, Cummins, General Motors, Bunge, Apple, Facebook, General Electric (a flood of red ink), Pfizer, Dow Dupont, Estee Lauder, Kraft Heinz, Starbucks, CBS, New York Times Co, Exxon Mobil and Chevron will also be reporting next week.
Apple’s biggest shareholder, Berkshire Hathaway is due to report late Friday our time. The shares fell 1.7% on Friday and 5.4% last week. They are up 0.14% year to date while the S&P 500 is down 0.56%.
