Now We See How Much of a Leader Apple Remains

In a testament to just how rabid the animal spirits have become on Wall Street these days, the glaring weakness in Apple in 2024, heretofore, has barely put a dent in the broad market for all of winter and a fair amount of Q2.

No, for all of Q1 the likes of NVDA and SMCI, not to mention Magnificent 7 peers like MSFT META NFLX, and others, openly laughed off the Apple weakness as some kind of outlier. 

However, if we zoom out over the last ten-to-fifteen years, there can be no doubt that AAPL has, easily, been the most widely-owned and widely-owned large cap tech stock on a consistent basis. And while the company's innovation certainly seems to have hit a roadblock, the brand strength of iPhones and MacBooks cannot be disputed. 

Hence, when we see the updated AAPL daily chart, below, relinquish all of the gains from the pre-Halloween 2023 bottom and subsequent sharp rally (which dovetailed with the broad market, of course), it begs the question of whether Apple remains a broad market leader yet. If so, then the broad market is only now beginning to crack and inevitably will follow Apple down to erase all of the five month-plus rally, which puts the S&P 500 back below 4103 eventually. 

While that may seem extreme, given that the S&P is above 5000 as we speak, you may have noticed many previously-dovish Fed speakers like Bostic touch a much more hawkish tone of late, with Bostic today noting that there may not be any rate cut at all until after the election (he said "towards the end of the year"). 

In addition, NFLX kicks off the mega cap tech portion of earnings season tonight, with most of the other Mag7 names reporting in the next two-to-three weeks. I expect a much tougher earnings season for them this time around as profit margins begin to get squeezed and the overall dark side of entrenched inflation rears its ugly head.