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“Success flourishes only in perseverance — ceaseless, restless perseverance.” – Baron Manfred von Richthofen
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
The Nasdaq may have broken its 13-day winning streak yesterday, but it’s looking to start a new one this morning. Futures on the S&P 500 and Nasdaq are both up nearly 0.5%, while the Dow, powered by a 7% rally in UnitedHealth Group (UNH), has that index on pace to gap up 0.65% at the open. Treasury yields are slightly higher, with the 10-year yield just under 4.26%, while crude oil is fractionally lower at just under $90 per barrel. All in all, it’s been a quiet overnight session as markets await the outcome of the latest on-again, off-again peace talks between the US and Iran. President Trump will also be interviewed on CNBC at 8:30, so investors will be focused on that for any potential headlines. Will he be talking about Iran, Kevin Warsh, or maybe even “Tim Apple’s” retirement?
In international markets overnight, Asian stocks were higher across the board, with South Korea surging 2.7% to a new record high and erasing all its 20%+ decline from late in the first quarter. European stocks are also trading with a positive bias, with the STOXX 600 0.2% higher, led by Germany and Spain, which are up 0.5%.
On the US economic calendar this morning, we’ll get Retail Sales at 8:30, and then Business Inventories and Pending Home Sales at 10 AM. The earnings calendar will also continue to pick up after the close with Capital One (COF), Intuitive Surgical (ISRG), and United Airlines (UAL) all on the calendar.
One of the world’s largest companies marked the end of an era last night when Apple (AAPL) announced that CEO Tim Cook would retire effective September 1st, just over 15 years after taking the helm in August 2011. During Cook’s tenure, AAPL’s stock rallied more than 1,900%, which works out to an annualized gain of 22.8%, or nearly 10 percentage points more than the 13.0% gain for the S&P 500!
As incredible as the stock’s performance has been, it ranks only 38th among current members of the index. Among the current group of trillion-dollar stocks, AAPL trails Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Nvidia (NVDA), and Tesla (TSLA) but is ahead of Microsoft (MSFT), Berkshire Hathaway (BRK/b), and Walmart (WMT). Meta (META) wasn’t even public when Cook took over as CEO, as its IPO wouldn’t be for another eight to nine months in May 2012.
The table below lists the 20 top-performing stocks in the S&P 500 since Cook took the helm at AAPL. NVDA’s 61K% gain is more than double the next closest stock (TSLA) and more than 30 times the gain of AAPL! There are three other stocks – Comfort Systems (FIX), AVGO, and Monolithic Power (MPWR) that have rallied more than 10,000%. While most have become household names, not all have. If you asked the average person to comment on the names listed below, many would probably see names like Comfort Systems (FIX) or Monolithic Power (MPWR) and ask why a mattrass company and utility are on the list, not knowing that the companies provide essential cooling (FIX) and power management systems (MPWR) for the data centers that power AI.
A look at AAPL’s performance under Cook shows what, in retrospect, looks like a steady uptrend with higher highs and higher lows, although there have been plenty of times along the way where the road ahead looked very uncertain. When Cook took the helm, AAPL was trading at a split-adjusted $13 per share. Yesterday, it closed just above $273, off nearly 5% from its all-time high of $286.19.
As steady as the rally in AAPL looks, the stock has seen a major shift in at least one respect over the last five years. For more than a decade, from the launch of the iPod through the launch of the iPhone, right up until Covid, AAPL was a steady alpha generator versus the market. A look at its relative strength versus the S&P 500, though, shows a sideways pattern that has been in place for more than five years. Will the new CEO “Ternus” around?
Looking at AAPL’s performance on a short-term basis shows the stock at an important juncture. After trading in a steady downtrend since its high late last year, AAPL tested that downtrend line over the last couple of days and appears to be stalling. While the stock successfully tested its 200-DMA in March and reclaimed its 50-DMA, the next step on the road to new highs and a potential return to outperformance will be a rally above $275.
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