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“Life is fragile. We’re not guaranteed a tomorrow so give it everything you’ve got.” – Tim Cook

Morning stock market summary

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There’s a positive mood across the global equity universe as stocks in Asia had a positive day, Europe is trading higher, and US futures are indicating a gain of about 0.6% at the opening bell, half of which can be attributed to Nvidia’s (NVDA) 9% pre-market gain.  Commodities are mixed but skewed to the downside, and both the dollar and US Treasury yields are slightly higher. It’s a busy morning for economic data with jobless claims, Chicago Fed National Activity Index, and Durable Goods at 8:30 and Kansas City Fed Manufacturing at 11:00.

The August pullback in equities has had the desired effect on sentiment as AAII’s weekly sentiment survey showed bullish sentiment declining for the third week in a row falling from 35.9% down to 32.3%.  That’s the lowest level since May 31st, and represents a nearly 20 percentage point decline from its recent peak of 51.4% on 7/19.

It’s hard to think about a more fitting statement from Tim Cook regarding his predecessor who resigned on this day twelve years ago.  After taking a leave of absence in January 2011 due to his battle with pancreatic cancer, Jobs formally stepped down as CEO on 8/24/11. The news was made public after the close, and shares fell sharply in the after-hours session before recovering.  The following morning AAPL dropped by just about 3% as analysts came out and defended the stock, and by the end of the day it was down less than 1%.  At first glance, the fact that the stock had such a muted reaction on news of the departure of one of the all-time greatest tech visionaries may seem counterintuitive, but Jobs had already given up most of his day-to-day responsibilities.  While no one could fill the shoes of a leader like Jobs, Tim Cook had (and continues) proved that he was more than capable of leading the company.  Just 41 days after formally leaving Apple, Steve Jobs passed away on 10/5/11.

The chart below shows the market cap of Apple since Steve Jobs returned to the company as CEO in 1997 through today.  Its market cap under Jobs is shown in blue, while Cook’s tenure is shown in green.  One of the most ironic aspects of the chart is that the vast majority of Apple’s market cap has accrued under Cook’s tenure.  When Jobs stepped down, Apple’s market cap was just under $348 billion compared to $2.8 billion today.  Put differently, more than 87% of the company’s current market cap came during the Cook years compared to less than 13% under Jobs.  Even crazier is the fact that in the 13 trading days that followed its peak on 7/31 through the close a week ago on 8/17, Apple lost more in market cap ($369 billion) than the company had accrued from the time it was founded through Jobs’ ultimate departure.

Obviously, this is a major oversimplification of the impact Steve Jobs had on Apple as well as the entire US economy, bit it also illustrates the importance of compounding, and Steve Jobs left Tim Cook with more than a substantial base to build off.

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