(Click on image to enlarge)

Fed Chair Jerome Powell was significantly more hawkish than expected in his post Fed Statement press conference Wednesday resulting in a selloff in stocks. Powell said he didn’t think a March rate cut was likely pushing up the odds of another pause on March 20 by 20% in the futures markets. The Fed now risks staying too tight for too long and causing the economy to roll over (“Fed Shouldn’t Take Too Long To Declare Victory On Inflation”, Greg Ip, WSJ 2/1).

(Click on image to enlarge)

This presents an interesting setup heading into Apple's (AAPL) earnings this afternoon. Most investors seem unaware that AAPL is no longer growing. In FY23 ended September 30, 2023, AAPL revenue declined from $394 billion to $383 billion and net income from $100 billion to $97 billion. (EPS edged up to $6.13 from $6.11 only because AAPL bought back about 500 million shares). Of the five categories into which AAPL divides its business, only Services grew its top line in FY23 (+9%). And yet AAPL shares still trade like a growth stock with huge opportunities ahead of it with a multiple of around 30x. Unless AAPL has an ace up its sleeve, it’s only a matter of time before investors realize that the emperor has no clothes.

More By This Author:

The Magnificent 7 Will Go The Way Of The Nifty 50
TSLA Is Still Expensive But It’s A Long Term Winner
Logic Is With The Bears, Animal Spirits With The Bulls; NFLX Earnings