Thursday April 1, 2021: $123.00 +$0.85 +0.70%

[Dave]

Good morning and welcome to April. We have a green pre-market this morning at +$1.35 at the moment. Here’s hoping.

TSMC to Spend $100 Billion Over Three Years to Grow Capacity

In a letter to customers obtained by Bloomberg News, TSMC Chief Executive Officer C.C. Wei wrote that the company’s fabs have been “running at over 100% utilization over the past 12 months,” but demand still outpaced supply. Thousands of new employees are being hired and multiple new factories are under construction, he added, and TSMC will suspend wafer price reductions for a year from the start of 2022.

[Dave]

Premarket: Apple is green

Many investors are hopeful that stocks will continue to climb in the second quarter, aided by the prospect of a surge in economic growth as vaccinations become widespread and fresh spending programs from the Biden administration. Still, they point to risks stemming from rising bond yields, new lockdowns in Europe and signs of excess in corners in the market.

Some are questioning whether the switch out of technology stocks and into economically-sensitive sectors like banks and energy has gone too far. Having powered the broad market higher in 2020, the rally in tech stocks slowed in the first quarter as investors bought into companies that stood to benefit from the economic rebound.

“We are entering a period of time when there is a bit more risk, and for that I want to have a more balanced approach,” said Lars Skovgaard Andersen, investment strategist at Danske Bank Wealth Management. Mr. Andersen thinks information-technology stocks such as Microsoft and Salesforce.com would provide a cushion if cyclical stocks lose momentum.

Semiconductor producers and others stand to benefit from President Biden’s infrastructure package, he added. Mr. Biden on Wednesday unveiled a $2.3 trillion infrastructure plan centered on fixing roads and bridges, expanding broadband internet access and boosting funding for research and development.

Fresh data due Thursday will give investors clues about the pace of economic growth toward the end of the first quarter.

My take: Two greens in a row. Three would make a trend.

[Dave]

Apple Options Traders See Upside Ahead

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

[hledgard]

Interesting. I did not know what a "sweep" was.

PS. And thanks for opening the thread so many times ! !

[chinacat]

Cult of Mac has 45 ways Apple put a ding in the universe. Also, Apple could announce another record-breaking quarter on April 28.

[duckpins]

Large sell off today after AAPL opening up at 124. April may be the cruelest month but not for stocks. Next week should be interesting. Do we have lift off? Note the China stocks are up and most EV stocks up as well. There is a herd mentality at work with them. Maybe the news about the Hwang's loss of his heavily leveraged 30 billion dollar portfolio has finally cleared the air so the the Chinese planes can take off? Apple scruffs are all up today save 1 called Socket Mobile, not even sure what their role is.

[4aapl]

Happy to have a green day, even if it's small.

Looks like Thurs-Monday was 3 green days in a row. This is 2, after a reset. Down from a full month ago, but up a few bucks from 4 weeks ago, and the $116 low a few days later.

It's slow this time of the year.

[archibaldtuttle]

Very solid day for the stock market. Mediocre for AAPL.

Nasdaq was up 1.77%, S&P broke a major level to reach new all time highs.
AAPL couldn't even get above yesterday's highs.

Caution still warranted.

[Dave]

Goldman’s Rod Hall is still telling clients to sell Apple

As we look forward to re-opening we publish a deep dive on Apple’s Services revenue including the first update on our TAC estimates and forecasts since COVID impacts in 2020.

We conclude that TAC (traffic acquisition cost) growth materially slowed to 11% in 2020 from an estimated 25% in 2019 with a rebound to 29% growth forecast for 2021. In absolute terms our 2020 TAC estimate is now $12bn given this slowdown but we forecast a rebound to $15bn in 2021.

We also anticipate a slowdown in App Store revenue to $19bn in CY22 which we believe consensus has not accounted for and which could lead to downside risk for consensus Services estimates in that year.

In addition, we note that the TV+ free trial continues to redistribute product revenue into Services and would likely result in about a 4% negative impact to our CY22 Services forecast if it were to end. This causes us to assume that Apple will maintain the free trial for at least our forecast period and we update our model to reflect this. We also point out that Apple’s TV+ subscriptions could improve later this year as COVID impacts on content production and release may have negatively impacted paid subscribers.

Finally, we update our detailed Services gross margin model to reflect these changes with our gross margin estimates more or less in line with consensus. Our new Apple Services revenue forecasts based on this work are now in line with FY21 consensus but 5.5% below FY22 consensus estimates…

Our price target is unchanged at $83, as the slight increase in our EPS forecast is offset by a lower S&P 500 multiple. Our new price target is based on 22.0x (previously 22.3x) our Q5-Q8 EPS forecast of $3.79 (previously $3.70). Our multiple is consistent with the S&P 500 NTM PE consensus multiple at 22.0x (22.3x previously). Key upside risks include better-than-expected iPhone demand, stronger demand for Wearables, better-than-expected Services growth, OpEx reductions, and significantly outsized buybacks and meaningful dividend increases.

Maintains Sell rating and deep underwater $83 price target.

Could this be an April’s Fool joke? This is the first day of April, and we are dealing with a fool. I think that it’s a joke. 

Be sure to check out the comments section.

Sorry about that, the link should be working now.

[Ted]

Apple CEO Tim Cook condemns the Georgia voting restrictions in a statement to Axios: "Apple believes that, thanks in part to the power of technology, it ought to be easier than ever for every eligible citizen to exercise their right to vote."

Outrageous, huh?

[Ted]

Now why does this ring a bell?

arstechnica.com/tech-policy/2021/04/amazon-colluded-with-publishers-to-fix-book-prices-class-action-suit-alleges/

[chinacat]

Apple press release: Apple powers ahead in new renewable energy solutions with over 110 suppliers.

AppleInsider has Apple rejecting apps that collect data for 'device fingerprinting’.