Tech Volatility to Ignore, and Some to Respect…

The following essentially serves as a good example of market myopia. I.e., how short-term trading can shake up stock prices and, alas, have an unsuspecting long-term investor wondering or, worse yet, acting.

Question: If you were in the market for a new smart phone, and you happen to be an iPhoner, would you jump all over the 8 with its attendant contract for $699, or would you wait a couple of months for the X (google it if you don’t already have the specs) and pay $999?

In light of today’s selloff of all things Apple on news that iPhone 8 pre-orders have been underwhelming, I sent the following to our in-house (among other things) tech guru Nick:

I wonder if the pending X gets in the way of 8 sales??

His reply:

Yes, definitely! It’s not that much more expensive. Everyone I’ve talked to says they’re getting the X.

Again, Apple’s trading markedly lower today, as is a number of its component/tech suppliers, apparently on the news that iPhone 8 pre-orders are notably fewer than previous models at this juncture (the beginning of the selloff coincided with the news release). Even the ETF that tracks lithium miners is off 2.4% as I type — and, clearly, they’ve got a lot going on in addition to cell phone batteries.

To the extent that Apple’s news is affecting our tech exposure today (it’s the biggest component), which is off 0.6% (XLK), it’s volatility to ignore. Our macro view, however, that leans toward a higher-trending dollar going forward amid higher interest rates, is a legitimate headwind for tech, hence our recent lowering of our target to the sector.

Share on linkedin
Share on facebook
Share on twitter
Share on email
Share on pinterest

Recieve Between the Lines Posts to your Inbox

Sign up for lorem ipsum delores sin.

We care about the protection of your data. Read our Privacy Policy.