Apple shares fall while consumer prices rise

key takeaways

• cpi composite
• Apple
  AAPL
  There is a lack of excitement in the event
• Oil prices are rising

An uninspiring Apple event and disappointing Oracle earnings
orcl
Stock was sent less on Tuesday. The S&P 500 fell 0.6% and the Nasdaq Composite dropped 1%. With fears of a possible autoworker strike looming and today’s Consumer Price Index (CPI) report being stronger than expected, we’ll see if stocks continue their decline. Core CPI (except fuel and energy) in August showed that prices rose 0.3% on a month-on-month basis, slightly above the 0.2% forecast. In line with forecasts, the CPI (including food and energy) increased by 0.6%. On a year-on-year basis, CPI increased by 3.7% compared to 3.6%.

On Monday, after the close, Oracle announced earnings that missed forecasts and presented a disappointing outlook for the rest of the year. Analysts were expecting revenue growth of 8% in the current quarter, but the company said the actual number would be between 5-7%. Oracle shares fell 13%, the biggest one-day loss for the company since 2002 when the stock fell 15%.

Apple shares also declined on Tuesday. China claimed that security issues were behind recent announcements restricting the use of iPhones. According to a Bloomberg article, China is also planning to extend the ban on iPhones from state-owned companies to state-backed companies. This news comes soon after Apple unveiled the iPhone 15. The announcement was slower than previous years, with a greater focus on improved performance and battery life. Apple stock fell 1.7% on Tuesday and is down 10% from its July high. Shares are slightly underrepresented in premarket activity.

Automaker shares rose yesterday after the United Autoworkers Workers (UAW) softened the blow on some of its demands. At the same time, UBS issued a buy rating on Ford after the recession and also initiated coverage on General Motors.
GM
With a buy rating. I find this interesting considering the risk of a strike being just a day away. Shares of Ford rose 1.9% Tuesday while shares of General Motors and Stellantis both rose 2.6%.

The same is happening this morning, with Deloitte projecting holiday retail sales to grow 3.5 – 4.6% this year. This is a report that caught my attention for a few reasons. As I discussed last week, consumer debt levels reached $1 trillion for the first time during the second quarter. Additionally, credit card denial rates are at their highest level since 2021, according to the Federal Reserve Bank of New York. Finally, we are seeing oil prices rising and rising oil prices could lead to rapid inflationary pressures, prompting buyers to fill up their cars with gas or buy gis with kung fu grips for their kids. Who will be forced to choose between buying (and if you don’t get that reference, you haven’t seen one of the all-time great holiday movies, Trading Places). I’ll keep monitoring to see if there are any changes to the forecast as the holiday season approaches. Still, seeing growth forecast is positive for the economy overall.

Some other items of note include Birkenstock filing for an initial public offering. The shoe company is considering raising $7 billion. Moderna says it has developed a new flu vaccine with greater efficacy than existing vaccines and will seek FDA approval. Finally, I want to point out the levels in the VIX. Despite yesterday’s decline, volatility remains low. In the premarket, the VIX is below 14.50. Traders typically look to the VIX to confirm directional movements in the market. The VIX should fall on bullish market days and rise on declining days for stocks. However, we have not seen the VIX move much at all on days when the market was down. So, I think the market is still somewhat in uncharted territory and there’s no reason to believe we’ll see a big directional move one way or the other. As always, I will stick to your investment plans and long-term objectives.

TastyTrade, Inc. Comments for educational purposes only. This material does not constitute trading or investment advice or a recommendation, nor is it intended to imply that any investment product or strategy is suitable for any person.