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Anybody betting against Apple better rethink the thesis

Aug 03, 2023

Good morning! 👋

Futures are falling as Wall Street waffles, or so go the headlines.

This is a classic “rug pull” intended to separate the short-term punters from their money.

And, as is usually the case, an opportunity.

Here’s my playbook.

The biggest names are NOT worried; you shouldn’t be either

“There are some things people shouldn’t worry about,” Warren Buffett said when asked about Fitch’s US downgrade. “This is one.” (Read)

JPM’s Jamie Dimon observed that Fitch’s downgrading the US for the 2nd time in American history is “ridiculous” but in the end “doesn’t really matter.” (Read)

Wharton’s Jeremy Siegel called Fitch’s pronouncement “ridiculous” and said there’s no chance of default.

MyPOV: Fitch’s downgrade is nothing more than a failed rating agency trying to remain relevant. Concentrate on the world’s best companies and what they’re doing to produce profits that help build YOUR financial future.

Speaking of which…

It’s Apple’s day

Apple reports today after the bell, and analysts are expecting softer numbers, but I actually think there’s a good chance that Team Cook will knock the leather off the ball.

I’ll be watching services, any new information on AI, India, and the company’s plans for personal finance very, very closely.

Don’t forget…

that Apple historically outperforms between August and September, which is consistent with the company’s new iPhone release cycle
India has traditionally been Google’s turf, and Apple is getting ready to kick its asteroids
Apple’s savings account has already brought in $10B in deposits—despite people having been Apple Card holders only since April

$225.

I would have purchased more yesterday, but there was no cell service where my son and I were riding… so I added a few shares in the pre-market.

You?

Bud: Buy, sell, or hold?

Anheuser-Busch InBev beat forecasts, but sustained backlash remains. The latest numbers suggest the brand’s controversial partnership with transgender influencer Dylan Mulvaney has cost the company a whopping $395 million in lost US sales and counting. (Read)

Q2 revenues are +7% globally, largely as the result of price hikes that offset a -1.4% fall in volume. Notably, the company reiterated full- and medium-term outlooks.

As much as I love a turnaround story, Heineken CEO Dolf van den Brink makes a good point when he says that “polarization in society” continues to impact businesses and brands. (Read)

I agree.

Heineken, BTW, just cut its 2023 forecast while reporting a 5.6% decline in beer sales and an 8.8% decline in operating profit. Disney has the same challenge.

Bud’s technical price action makes me think that a fall into the $40s is more likely than punching through what appears to be considerable resistance in the $60-a-share range.

Sell or avoid, particularly if shares jump on earnings, as I think will be the case by the time you read this.

Putskies could work well if you fancy a speculative trade and want to play to the downside.

Saudi Arabia’s at it again

Saudi Arabia is planning to extend production cuts totaling 1 million barrels a day into September. (Read) And, according to the SPA (Saudi Press Agency), that “can be extended or extended and deepened.” (Read) Meanwhile, Brent crude is at $83.86 and WTI at $80.25; both are climbing.

This isn’t rocket science.

ECON 101 dictates that decreased supply + rising demand = higher prices.

I think there’s a good case to be made for $100 a barrel into 2024/2025.

My favourite oil stock has returned nearly 75% since I recommended it to the One Bar Ahead® Family, and there’s still plenty of upside, IMHO. The S&P 500, by comparison, is slightly down -0.49%. Upgrade to Paid

Is AI’s goose cooked?

I’ve been asked about that a lot lately, and my answer is just as consistent as the sun coming up tomorrow. The game is just getting started.

But which chip makers to buy?

I’ve recommended 2 in One Bar Ahead®, my premium investing journal. Both are poised for what just may be a dramatic run higher as AI accelerates.

Speaking of which, the August issue drops tomorrow, and there’s still time to get on board if you’d like to. I’ll be sharing a new recommendation that’s already using AI to boost margins and revisiting one of the hottest retail stocks on the planet. I’ve also got a few thoughts on the importance of doing what Wall Street does, not what it says. And, finally, a look at how the changing world order will impact your money in ways that most investors don’t yet understand. Upgrade to Paid