January 2024

US Inflation Rate – What is it? How can you use for investing decisions? All you need to know about it!!!

Key Takeaways – US Inflation Rate

  1. US inflation rate shows the percentage change in the prices of goods and services from one year to the next.
  2. The Federal Reserve uses monetary policy to control inflation and keep it at or near its target rate of 2%
  3. Adjust your investments to match your inflation assumptions and investment horizon
  4. Diversify your portfolio with commodities, bonds, and inflation-protected investments to balance out losses from inflation.
  5. International stocks, commodities, real estate and cash may be more important in higher-inflation environments.
US Inflation Rate

What is US inflation rate?

The US inflation rate is the percentage change in the prices of goods and services over a period of time. It affects the purchasing power of money and people’s standard of living. The current inflation rate in the US is 3.14%, calculated based on CPI (Consumer Price Index) values for the last 12 months ending in November 2023. The annual inflation rate in the US has increased from 3.2% in 2011 to 8.3% in 2022. This means that the purchasing power of the US dollar has weakened in recent years. The question answering result also provides the same answer for the current inflation rate in the US.

How US inflation rate is measured?

The US inflation rate is measured by the Consumer Price Index (CPI), which is produced by the Bureau of Labor Statistics (BLS). The CPI tracks the changes in the prices of a basket of goods and services that represent what Americans buy in their everyday lives. The CPI is calculated by comparing the current prices of the basket items to their prices in a base year. The percentage change in the CPI over a period of time is the inflation rate. For example, if the CPI rises by 3% year over year, then the inflation rate is 3%.

What are the different types of inflation and how do they differ?

Inflation is the general increase in the prices of goods and services over time. There are three main types of inflation, according to the web search results:

Demand-pull inflation: This occurs when the demand for goods and services exceeds the supply, causing prices to rise. This usually happens when the economy is growing fast and consumers have more money to spend.

Cost-push inflation: This occurs when the costs of production for goods and services increase, causing prices to rise. This can be due to factors such as rising wages, taxes, energy, or raw materials.

Built-in inflation: This occurs when people expect inflation to continue in the future, causing them to demand higher wages and prices. This creates a self-fulfilling cycle of inflation.

These types of inflation differ in their causes, effects, and policy responses. For example, demand-pull inflation can be controlled by reducing the money supply or raising interest rates, while cost-push inflation can be alleviated by increasing the supply of goods and services or reducing taxes. Built-in inflation can be reduced by lowering inflation expectations or implementing credible anti-inflation policies.

How can inflation be managed and controlled by monetary and fiscal policies?

Inflation is rising prices over time. It harms the economy and people by making money lose value, lowering incomes and savings, and creating uncertainty and instability. Governments and central banks use policies to keep inflation in a good range.

Monetary policy controls inflation by changing the interest rate, the money supply, or the exchange rate. Higher interest rates lower inflation by reducing money and credit demand. Lower interest rates raise inflation by increasing money and credit demand. The central bank can also use other methods, like buying or selling bonds, changing bank reserves, or printing more money.

Fiscal policy helps control inflation by changing the government spending and taxation. Less spending or more taxation lower inflation by reducing demand. More spending or less taxation raise inflation by increasing demand. But fiscal policy can hurt the public finances, like increasing the deficit and the debt, which can limit the government’s ability and trust.

The best mix of policies depends on many factors, like the type, source, and duration of inflation, the economy, the rules and institutions, and the goals and limits. Usually, monetary policy is the main way to control inflation, while fiscal policy supports it by keeping a stable budget and spending on public goods and services.

How does inflation impact the financial markets and investments?

Inflation is the general increase in the prices of goods and services over time. It affects the value of money and the returns of investments.Inflation can have different impacts on different types of financial markets and investments, such as:

Stock market: Inflation can hurt the stock market by lowering the earnings and growth prospects of companies, and by increasing the interest rates and the discount rate for future cash flows. However, some stocks can benefit from inflation if they can pass on the higher costs to customers or if they operate in sectors that are less sensitive to inflation, such as technology, health care, or consumer staples.

Bond market: Inflation can hurt the bond market by eroding the real value of the fixed coupon payments and the principal repayment. Higher inflation also leads to higher interest rates, which lowers the prices of existing bonds. However, some bonds can hedge against inflation, such as inflation-linked bonds, which adjust their payments according to the inflation rate, or short-term bonds, which have less exposure to interest rate risk.

Commodity market: Inflation can benefit the commodity market by increasing the demand and prices of raw materials, such as oil, gold, or agricultural products. Commodities can also serve as a store of value and a hedge against inflation, especially when the inflation is caused by supply shocks or currency devaluation.

Real estate market: Inflation can benefit the real estate market by increasing the value and rents of properties, and by reducing the real burden of mortgage debt. Real estate can also provide a steady income and a hedge against inflation, especially when the inflation is caused by demand shocks or economic growth.

How large investors react to US inflation rate data?

Large investors use different buy and sell strategies based on inflation rate to optimize their portfolios and returns. Here are some examples of specific strategies for different types of assets, according to the web search results:

Stocks: Large investors buy stocks that gain from inflation, like those that charge more or work in sectors that resist inflation, such as tech, health, or staples. They sell stocks that lose from inflation, like those that earn and grow less or work in sectors that face inflation, such as utilities, telecom, or finance.

Bonds: Large investors buy bonds that protect from inflation, like inflation-linked bonds, which change their payments with inflation, or short-term bonds, which face less interest rate risk. They sell bonds that drop from inflation, like long-term bonds, which face more interest rate risk, or fixed-rate bonds, which have fixed payments that lose value.

Commodities: Large investors buy commodities that rise with inflation, like oil, gold, or crops. They also store value and hedge inflation, especially from supply shocks or currency drops. They sell commodities that fall with inflation, like metals, minerals, or materials.

Real estate: Large investors buy real estate that rises with inflation, like homes, offices, or factories. They also earn income and hedge inflation, especially from demand or growth. They sell real estate that falls with inflation, like luxury, leisure, or hospitality.

Large investors use strategies based on the inflation rate to buy and sell assets. But these strategies vary with many factors, like inflation causes, types, and levels, the economy, the assets, and the investors. So large investors always watch inflation and interest rates, study data and trends, and change their asset mix and spread.

How common investors should react to investments based on US inflation rates?

Common investors should react to investments based on US inflation rates by understanding how inflation affects their money and returns, and by choosing the appropriate assets and strategies to hedge against inflation risk.

Saving more and spending less to preserve the purchasing power of money and to avoid the erosion of incomes and savings by inflation.

Investing in a diversified portfolio of low-cost stock index funds, which can provide long-term growth and income, and can benefit from inflation if the companies can pass on the higher costs to customers or operate in sectors that are less sensitive to inflation, such as technology, health care, or consumer staples.

Investments in inflation-linked bonds adjusts their payments according to the inflation rate, or short-term bonds. It has less exposure to interest rate risk, and avoiding long-term bonds, which have more exposure to interest rate risk, or fixed-rate bonds and have fixed payments that erode in real terms.

Investing in commodities, such as oil, gold, or agricultural products, which can increase in demand and price from inflation. It can also serve as a store of value and a hedge against inflation, especially when the inflation is caused by supply shocks or currency devaluation.

Investing in real estate, such as residential, commercial, or industrial properties, which can increase in value and rent from inflation. It provides steady income and hedge against inflation, especially when the inflation is caused by demand shocks or economic growth.

Synopsis

The U.S. inflation rate shows how prices change over time and affects the economy and consumers. The Fed tries to keep inflation around 2% using monetary policy. In 2022, inflation spiked to 9.1% due to the COVID-19 pandemic. It eased to 2.7% in 2023 as the economy recovered. In 2024, it is expected to be 2.3% as the economy grows moderately. You should diversify your portfolio with assets that hedge against inflation, such as stocks, commodities, real estate, and inflation-protected securities. Work with a financial professional who can help you adjust your strategy according to the inflation outlook and your goals. This way, you can protect your wealth and achieve your objectives in any inflation environment.

To know more about macroeconomic factors, please reach out to our blog at https://financeguide4u.com/macronomic-factors/

If you have questions about stock investment, reach out to my space on quora to read Q&As. FInanceguide4u (quora.com)

US unemployment rate – What is it? How can you use for investing decisions? All you need to know about it!!!

Key Takeaways – US unemployment rate

  1. The U.S. unemployment rate is a measure of the percentage of the total labor force that is jobless and actively seeking employment.
  2. U.S. unemployment data can be a valuable tool for informed investment decisions.
  3. Looking beyond national averages to regional and demographic data can reveal promising opportunities.
  4. It’s essential to consider long-term trends and not react to every change.
  5. Unemployment data should be used in conjunction with other economic indicators for a comprehensive view.
US unemployment rate

What is the US Unemployment Rate?

The US unemployment rate represents the percentage of the labor force (those actively seeking or employed) who are currently unemployed. This is one of the important macroeconomic factors in various aspects. In November 2023, this rate stood at 3.7%, near historic lows. While this indicates a generally robust job market, it’s essential to remember that this is just a headline number, and the reality for some groups and industries is far different.

Why US unemployment rate data is important?

Here are some key reasons why it matters:

Gauging Economic Health: The unemployment rate shows how well the US economy is doing. A low rate means more economic activity, confidence, and jobs. A high rate means less growth, recession, and spending.

Informing Policy Decisions: Unemployment data helps officials and policymakers make economic and social policies. This covers interest rates, job training, unemployment support, and minimum wage changes.

Assessing Inequality: The unemployment rate may look good, but it hides differences across groups and sectors. Unemployment data by race, gender, age, and sector shows unequal employment chances and helps make policies to fix them.

Guiding Individual Choices: Job seekers use unemployment data to know job trends, choose careers, and set wages. Businesses use this data to plan hiring, change pay, and get talent.

Predicting Future Stock Market Movements: Unemployment data helps investors and analysts decide on stocks, real estate, and other investments.

The US unemployment rate data guides people, businesses, and policymakers in the changing American economy. It helps understand problems, forecast trends, and make a better future for all.

How US unemployment rate affect the stock market?

The relationship between the US unemployment rate and the stock market is complex and nuanced, with no one-size-fits-all answer. Here’s a breakdown of the possible effects:

Potential Positive Effect on The Stock Market:

Lower Unemployment = More Consumers: A low unemployment rate means a good economy with more people working and making money. This can make people spend more, which helps businesses and makes them earn more. This more earning can make stocks go up.

Investor Confidence: A stable or declining unemployment rate can signal investor confidence in the economy’s future. This can drive up demand for stocks, pushing prices higher.

Reduced Government Intervention: Low unemployment means less government action in the economy, like money help or rules. This can be good for the stock market.

Potential Negative Effect on The Stock Market:

Higher Wages = Lower Corporate Profits: If a tight labor market leads to higher wages, this can eat into corporate profits, reducing their attractiveness to investors and potentially pushing stock prices down.

Interest Rate Hikes: The Fed may increase rates to stop prices from rising if unemployment is low. This can make loans costlier for businesses and people, possibly slowing down the economy and making stocks go down.

Economic Uncertainty: A sudden rise in unemployment could signal broader economic problems, leading to investor panic and sell-offs in the stock market.

Additional factors affecting the Stock Market:

The Unexpected: The market likes surprises in the unemployment rate more than expected ones. A sudden low unemployment may make stocks go up more than a slow low.

Industry-Specific Impacts: Different industries feel different effects. For example, sectors that need consumer spending do better with low unemployment than sectors that don’t.

The US unemployment rate and the stock market change a lot and depend on many things. A low rate usually means a good market, but you need to look at the whole economy and surprises to see the whole picture. Remember, this is just a summary, and it’s smart to talk to a money expert before investing based on economic data.

How do large investors use US unemployment data to make investment decisions?

Big investors use US unemployment data as a crucial piece of the puzzle when making investment decisions, but not in isolation. Here’s how they leverage it:

Gauging Economic Health:

Low Rate + Strong Economy: Low unemployment means a good economy with more spending and business. This can mean more growth for different sectors, making people invest in stocks, houses, or funds.

High Rate + Slowdown: A high unemployment rate may mean a bad economy, making people invest carefully. Investors may choose safer things like bonds, gold, or basic goods that do well in hard times.

Predicting Consumer Behavior:

Consumer Confidence: Unemployment data shows how people feel and spend. A low rate and high wages mean more spending power, helping shops, trips, and fun sectors. Investors may invest in these sectors.

Wage Pressures: High unemployment means low wages, hurting sectors that need people to spend more. Investors may skip these sectors and choose those that serve basic needs (food, power) that don’t change much with wages.

Assessing Company Performance:

Labor Costs and Profitability: High unemployment means low labor costs for some companies. Investors may invest in industries that need more workers and pay less wages.

Talent Acquisition and Retention: Companies struggling to hire in a tight labor market might face higher operational costs or talent shortages. Investors might be cautious towards such companies.

Beyond the Headline Number:

Digging Deeper: Big investors don’t rely solely on the national unemployment rate. They analyze regional variations, demographic breakdowns (youth, minorities), and sector-specific trends to identify niche opportunities or potential risks.

Combining Data Points: Unemployment data is used in conjunction with other economic indicators like inflation, GDP growth, and interest rates to build a comprehensive picture of the economic landscape and make informed investment decisions.

Large investors leverage U.S. unemployment data for profit through detailed analysis. However, investing solely based on this is not advisable. It requires professional counsel and risk mitigation. As economic data fluctuates, investors adjust their strategies to stay ahead.

How should common investors use US unemployment data to make investment decisions?

Big investors use detailed strategies and vast data, but even regular investors can use the US unemployment rate for smarter choices. Here’s how:

Long-Term Thinking: Don’t react to every change! Look at the long-term trend. A consistently low rate might mean a strong economy, which could favor growth sectors like technology or healthcare. A rising rate might suggest safer options like consumer staples or utilities.

Look Beyond the Average: Don’t be misled by national averages. Look at regional data to find local economies with growing industries. Also, look at demographic data – if youth unemployment is falling, companies targeting young consumers might be a good bet.

Market Reactions: Watch how the market responds to unemployment data. Unexpected changes often cause bigger market movements. If the Fed raises rates due to low unemployment, be wary of sectors sensitive to interest rates like real estate.

Use Other Data: Unemployment data should be used with other indicators. If inflation is rising with low unemployment, it might signal an overheating economy and potential market corrections. Consider a diversified portfolio based on the broader economic situation.

Context Matters: Don’t make decisions based on just one data point. Unemployment data gives a general picture, but you should also consider company news, sector trends, and your risk tolerance.

Get Professional Advice: If you’re unsure, talk to a financial advisor. They can help interpret data, assess your risk profile, and suggest investment strategies that fit your goals and circumstances.

Regular investors might not have Wall Street’s tools, but using US unemployment data, careful research, and a long-term view can lead to smarter investment decisions and potentially a healthier portfolio over time.

Synopsis

Investors, both large and small, can use U.S. unemployment data to make informed investment decisions. This involves long-term thinking, looking beyond national averages, observing market reactions, combining unemployment data with other economic indicators, and understanding the context. However, it’s crucial not to base decisions solely on unemployment data and to seek professional advice when needed. This approach, coupled with careful research and a long-term perspective, can lead to smarter investment decisions and a healthier portfolio over time. Remember, knowledge is power in navigating the market.

To know more about Macronomic factors, please reach out to our blog at https://financeguide4u.com/macronomic-factors/

If you have questions about stock investment, reach out to my space on quora to read Q&As. FInanceguide4u (quora.com)

What is GDP? How GDP Data Affects the Stock Market? All you need to know about it.

Key Takeaways – Gross Domestic Product (GDP)

  1. Gross Domestic Product (GDP) is the value of a country’s output and shows its economic size and performance.
  2. GDP is calculated by three methods: expenditure, income, or production, and it can be modified for inflation and population to give more insights.
  3. GDP data is published quarterly and annually by the BEA, following a release schedule that includes three estimates: advance, second, and final.
  4. GDP data impacts many social factors, like confidence, spending, saving, rates, inflation, trade, and market.
  5. GDP data affects big investors’ choices, based on their goals, risk, and expectations, but it has some flaws and critiques.
Gross Domestic Product (GDP)

What is the Gross Domestic Product (GDP)?

GDP stands for gross domestic product, which is a monetary measure of the market value of all the final goods and services produced in a specific period by a country. GDP is used as an indicator of the size and performance of an economy. It can be calculated in three ways, using expenditures, production, or incomes. To provide deeper insights into the economic well-being of a country, GDP can also be adjusted for inflation and population.

Types of Gross Domestic Product (GDP)

Several types of GDP measure different aspects of a country’s economic performance. Some of the common types are:

Nominal GDP: This is the value of all final goods and services produced in a country at current market prices. It does not account for inflation or changes in the purchasing power of money. Nominal GDP is useful for comparing the size of economies across countries and regions.

Real GDP: This is the inflation-adjusted value of a country’s final output. Real GDP reflects the actual growth or decline of production and income in an economy. It is useful for comparing the economic performance of a country over time.

GDP per capita: This is the ratio of nominal or real GDP to the total population of a country. It indicates the average income or standard of living of a country’s residents. GDP per capita is useful for comparing the economic well-being of different countries or regions.

GDP growth rate: This is the nominal or real GDP growth rate. It shows how fast or slow an economy is expanding or contracting. GDP growth rate is useful for assessing the economic health and prospects of a country.

GDP by purchasing power parity (PPP): This is the purchasing power parity (PPP) GDP of a country. It accounts for the differences in the cost of living and the purchasing power of money across countries. GDP by PPP is useful for comparing the economic output and living standards of different countries or regions.

Potential GDP: This is the potential GDP of a country. It represents the maximum level of output that an economy can achieve without causing inflation or other economic problems. Potential GDP is useful for estimating the output gap and the productive capacity of a country.

How Gross Domestic Product (GDP) is determined?

GDP is determined by using one of the following three methods or formulas:

Expenditure approach: This is the expenditure-based GDP method. The formula is: GDP = C + G + I + NX, where C is consumption, G is government spending, I is investment, and NX is net exports.

Income approach: This method calculates GDP by adding up the income earned by all the participants in the economy. The formula is: GDP = Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income.

Production approach: This method calculates GDP by adding up the value added by each sector or industry in the economy. The formula is: GDP = Sum of Value Added by All Sectors or Industries.

All three methods should theoretically give the same result, but in practice, there may be some discrepancies due to data limitations and measurement errors.

When is GDP data published in the United States?

The U.S. Bureau of Economic Analysis (BEA) releases GDP data on a quarterly and annual basis. The quarterly data is released in three estimates: advance, second, and third. The advance estimate comes out one month after the quarter. The second estimate comes out two months after the quarter. The third estimate comes out three months after the quarter. The annual data is usually released in July of the following year. You can check the full release schedule for GDP data on the BEA website. For example, the following dates marked the release of the GDP data for the third quarter of 2023:

Advance estimate: October 26, 2023, Second estimate: November 22, 2023, Final Release: December 21, 2023

What does GDP data indicate about the economy of the United States?

GDP data affects the US economy in several ways. It reflects the size and performance of the economy, which influences consumer and business confidence, spending, investment, and saving decisions. GDP data also affects the monetary and fiscal policies of the government and the central bank, which aim to stabilize the economy and promote growth. GDP data can also affect the exchange rate of the US dollar, which impacts the trade balance and the competitiveness of US exports and imports.

How does GDP data affect the stock market?

GDP data can have a significant impact on the stock market performance, as it reflects the size and health of the economy. However, the relationship between GDP and the stock market is not always straightforward, as it depends on various factors, such as expectations, interest rates, inflation, and market sentiment. Here are some of the ways GDP data can affect the stock market:

GDP data can influence investor confidence and expectations. When GDP growth is strong and above expectations, investors may become more optimistic and bullish about the future prospects of the economy and the corporate sector, which can drive up stock prices. Conversely, when GDP growth is weak and below expectations, investors may become more pessimistic and bearish about the economic outlook and the earnings potential of businesses, which can drive down stock prices.

GDP data influences interest rates and inflation. High GDP growth can cause inflation and higher interest rates, which can hurt businesses and stocks. Low GDP growth can cause deflation and lower interest rates, which can help businesses and stocks.

GDP data impacts the exchange rate and the trade balance. Strong GDP growth can appreciate the currency and hurt exports, which can harm the economy and stocks. Weak GDP growth can depreciate the currency and boost exports, which can help the economy and stocks.

As you can see, GDP data can affect the stock market in various ways, depending on the context and the interpretation of the data. Therefore, it is important for investors to analyze not only the GDP figures, but also the underlying factors and trends that drive them.

How big investors changes investment decisions based on GDP data?

Big investors can change their investment decisions based on GDP data in various ways, depending on their expectations, risk appetite, and investment objectives. Here are some of the possible scenarios:

If GDP data is higher than expected, big investors may interpret it as a sign of a strong and growing economy, which can boost their confidence and optimism. They may increase their exposure to riskier assets, such as stocks, commodities, and emerging markets, that can benefit from higher economic activity and demand. They may also reduce their exposure to safer assets, such as bonds, gold, and defensive sectors, that can lose value due to higher interest rates and inflation.

If GDP data is lower than expected, big investors may interpret it as a sign of a weak and slowing economy, which can lower their confidence and optimism. They may decrease their exposure to riskier assets, such as stocks, commodities, and emerging markets, that can suffer from lower economic activity and demand. They may also increase their exposure to safer assets, such as bonds, gold, and defensive sectors, that can gain value due to lower interest rates and inflation.

If GDP data is in line with expectations, big investors may not change their investment decisions significantly, as they have already priced in the expected economic performance. They may adjust their portfolio allocation slightly based on other factors, such as market sentiment, earnings reports, and geopolitical events.

Of course, these are generalizations and not every big investor will react the same way to GDP data. Some big investors may have different expectations, risk preferences, and investment horizons than others. Some big investors may also use other indicators, such as consumer confidence, unemployment, inflation, and business activity, to complement GDP data and make more informed investment decisions.

Synopsis

GDP data measures the economy’s size and performance, which impacts many aspects of society. GDP is computed by three ways: spending, earning, or making. The BEA releases GDP data quarterly and annually, with three estimates: advance, second, and third. GDP data affects the investment choices of big investors, based on their expectations, risk, and goals. GDP data helps understand and analyze the economy, but it has some flaws and critiques, such as ignoring environmental and social factors, quality of life, and income distribution. Use GDP data with other indicators and sources to get a better view of the economy’s well-being.

To know more about macroeconomic factors, please reach out to our blog at https://financeguide4u.com/macronomic-factors/

If you have questions about stock investment, reach out to my space on quora to read Q&As. FInanceguide4u (quora.com)

Why is Apple Stock Price Dropping? Is it right time to invest? All you need to know about it.

Why is Apple Stock Price Dropping?

Apple (AAPL) is a top tech company, famous for its products and services like iPhone, iPad, Mac, etc. Its stock trades on NASDAQ and is part of major indices. It had a market cap of $2.829 trillion on January 4, 2024, the highest in the world. Its stock had ups and downs in 2023 due to challenges like supply issues, regulation, and competition. Revenue was $89.5 billion, down 0.72%, and its net income was $22.96 billion, up 10.79%. Its EPS was $1.46, up 13.18%. Its stock hit a record of $199.62 on December 14, 2023, but then fell by 6.9% to $185.64 on January 2, 2024. Two analysts downgraded Apple’s stock in early 2024, worried about weak iPhone sales and more competition. Apple’s stock future depends on many factors, such as new products and services, legal and regulatory issues, COVID-19, and the economy. Analysts predict Apple’s stock will rise by 7.6% in 12 months.

Why is Apple Stock Price Dropping?

Apple has seen its stock price tumble in recent weeks, raising concerns among investors and sparking curiosity about the underlying reasons. While there’s no single silver bullet, here’s a closer look at several key factors contributing to the slump:

Analyst Downgrade: Barclays analysts downgraded Apple from “neutral” to “underweight” due to expected underperformance.

  • Tepid iPhone Demand: iPhone sales, the backbone of Apple’s revenue, are showing signs of fatigue. Analysts cite market saturation, rising competition from Chinese players like Huawei, and high price points for newer models as potential culprits.
  • Softness in Other Segments: Besides iPhones, other hardware categories like Macs and iPads haven’t exhibited the desired growth, further dampening investor sentiment.
  • Services Growth Plateauing: While Apple’s services sector has been a bright spot, analysts anticipate a slowdown in its growth rate, raising concerns about future revenue streams.

Macroeconomic Headwinds: Economic factors also affect Apple. Higher rates and inflation scare investors away from tech stocks. A possible recession worsens the mood, making some sell Apple despite its stability.

Market Correction After a Stellar 2023: Apple’s stock soared 50% in 2023. After such a big rise, the price often drops a bit. This normal trend also explains the fall.

Geopolitical Risks: US-China trade war and China’s iPhone ban for officials make Apple’s future uncertain. Apple is under regulatory scrutiny and legal challenges from the European Union and other authorities over its App Store practices and antitrust issues

iPhone 15 Lackluster Reception: Although official sales figures aren’t out yet, early reports suggest the iPhone 15 hasn’t been as warmly received as hoped. This further fuels bearish sentiment, as investors worry about future iPhone iterations failing to reignite demand.

Looking Ahead: Don’t panic, think long-term. Apple is still strong and innovative. The price drop may attract some buyers, others may watch.

What large investors are doing with Apple stock?

While it’s impossible to know exactly what every large investor is doing with their Apple stock at any given moment, we can analyze recent trends and public statements to get a general sense of their sentiment:

Holders with Consistent Positions:

  • Vanguard and BlackRock: These two financial giants are Apple’s top two shareholders, collectively controlling over 15% of outstanding shares. Both have publicly stated their long-term commitment to Apple, suggesting they are unlikely to sell their holdings significantly in the near future.
  • Berkshire Hathaway: Led by Warren Buffett, Berkshire Hathaway has been a vocal supporter of Apple for years. Buffett recently called Apple “the single best business in the world” and reaffirmed his confidence in the company’s long-term prospects.

Mixed Signals:

  • State Street Corporation: Although they hold a significant number of Apple shares, State Street hasn’t made any recent public statements regarding the stock. Their actions may be guided by internal analysis and client-specific strategies.
  • Mutual Funds and ETFs: These investment vehicles typically hold diversified portfolios, including Apple. Their actions might be indicative of broader market sentiment towards tech stocks rather than a specific stance on Apple.

Potential Sellers:

  • Hedge Funds: These short-term focused investors might be more susceptible to market fluctuations and analyst downgrades. Some may choose to sell their Apple holdings if they lose confidence in the company’s short-term performance.
  • Active Portfolio Managers: Some fund managers who actively manage their portfolios might take a tactical approach. They might sell some Apple shares to rebalance their holdings or hedge against broader market risks.

Additional Factors to Consider:

  • Recent Insider Sales: While insider sales don’t always signal negative sentiment, they can raise some eyebrows. Notably, some Apple executives sold a small portion of their holdings recently, although the reasons might not be related to concerns about the company’s performance.

These are general views from public data. To study individual investors, you need more data and analysis. Do your own research before investing like large investors. They may have different plans and results than you. Past results don’t guarantee future ones.

What should common investors do with Apple stocks?

With P/E ratio of 30 and Proce/Book ratio of 42, this stock is definitely over values from the perspective of defensive investors.

Barclays analyst Tim Long and Piper Sandler analyst Harsh Kumar downgraded Apple’s stock in early 2024, due to weak iPhone sales, supply chain issues, and macroeconomic headwinds. Long lowered his rating to underweight and price target to $160, while Kumar lowered his rating to neutral and price target to $205, expecting Apple’s stock to underperform in the near term.

Apple is definitely stong cmpnay and inevstors should keep it’s stock in their portfolio, however, this price is definitely looks high for inevstment. Common investors should wait and buy the stock is much lower than current price.

Synopsis

Apple (AAPL) is the world’s top company, famous for its products and services like iPhone, iPad, Mac, etc. Its stock had ups and downs in 2023 due to challenges like supply issues, regulation, and competition. Its stock hit a record of $199.62 on December 14, 2023, but then fell by 6.9% to $185.64 on January 2, 2024. Two analysts downgraded Apple’s stock in early 2024, worried about weak iPhone sales and more competition. Apple’s stock future depends on many factors, such as new products and services, legal and regulatory issues, COVID-19, and the economy. Analysts predict Apple’s stock will rise by 7.6% in 12 months.

Read Nike story at https://financeguide4u.com/nike-stock-price/

If you have questions about stock investment, reach out to my space on quora to read Q&As. FInanceguide4u (quora.com)