S&P 500 Had Its Best January Since 1987

This is similar in that both firms are giving out less information on their main product to drive focus on less products.

The big difference is iPhone unit sales are declining while Facebook daily active users are still increasing. The difference between the two companies is Apple needs to constantly sell people a new phone. 

S&P 500 - Facebook needs to keep users addicted to its service. 

Each upgrade to new iPhones is more incremental. On the other hand, Facebook just needs to not offend people. The biggest change to the service, which is the stories feature, is doing well.

The most important aspect of Facebook’s daily active user numbers is U.S. and Canada because they are monetized at a much higher rate than other regions. From Q3 2017 to Q4 2018, the number of daily active users has fluctuated between 184 million and 186 million. There isn’t much value if the number is stagnant. I’d rather know more about Instagram and WhatsApp.

Also, Apple wants investors to focus on Services, but the firm needs to sell devices to keep people buying services. Facebook doesn’t need people to use its main app to create an account on Instagram and WhatsApp.

A final point that makes this decision logical is Facebook is creating a messaging app that lets users on WhatsApp, Instagram, and Messenger communicate. 

The apps are becoming more unified, so the data should be unified. I would like Facebook to break down the numbers from WhatsApp and Instagram in more detail When Apple stopped reporting iPhone unit sales, it added data on margins. It would be a negative if Facebook didn’t give out any new data, but I don’t think that’s likely to occur.

S&P 500 - Conclusion

I think stocks are overbought especially relative to declining earnings estimates. However, with Facebook’s great earnings report, the market gained one of its leaders back. I expect Facebook to hit a new record high this year. 

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