Who Thinks Apple Can Go to $1000 ?

“Yesterday, Apple broke the $500 billion barrier.

This prompted many people, including me, to wonder whether it could get to $1 trillion.

And the answer to this question seems the same as it was when Apple was $200 a share–yes, it can.

A lot has to go right, of course. But given the relatively reasonable price of Apple’s stock versus Apple’s earnings (15X) and the growth potential for Apple’s three current businesses (Macs, iPhones, iPads) and expected future business (iTVs), it’s just not silly to think that Apple’s stock might double over the next few years.

Of course, any time you acknowledge the possibility that something startling might happen in the future, you get shelled by people who have a vested interest in that thing not happening–in this case, people who are short Apple’s stock or don’t own Apple’s stock.

These people howl in rage at your “hype” or smugly assert that you are a moron. And then they throw out a litany of reasons why what you said might happen might not happen.

And you know what?

They’re right.

Apple might not make it to $1 trillion.

Apple might crash. Apple might trade sideways forever. Apple might go into a decade-long funk and then eventually go bust.

Such is life in the technology industry.

Or any industry, for that matter.

But, still, it’s worth thinking in detail about what would have to happen for Apple to get to $1 trillion, as well as why that might not happen.

WHAT HAS TO HAPPEN FOR APPLE TO GET TO $1 TRILLION”

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BroadSoft Inc. (BSFT) : The maker of telecommunications software forecast first-quarter earnings of as little as 17 cents a share, excluding some items, compared with the average analyst estimate of 21 cents.

Buckle Inc. (BKE) rallied 2.4 percent to $46. The teen retailer said February same-store sales rose 15 percent, beating the average analyst estimate of 6.3 percent.

Clear Channel Outdoor Holdings Inc. (CCO) rose 15 percent to $15.20. The billboard company controlled by Bain Capital Partners LLC and Thomas H. Lee Partners LP plans to pay a $2.2 billion dividend, mostly to repay debt.

Finisar Corp. (FNSR) fell 9.7 percent to $18.32. The maker of fiber-optic transmission gear said it sees revenue in the fourth quarter of no more than $250 million, missing the average analyst estimate of $255 million.

Pegasystems Inc. (PEGA) rose 7.3 percent to $30.14. The developer of customer relationship management software reported fourth-quarter earnings of 16 cents a share, excluding some items, beating the average analyst estimate of 5 cents a share.

Seadrill Ltd. (SDRL) fell 3.7 percent to $40.51. The oil-rig operator whose largest owner is John Fredriksen said the billionaire’s Hemen Holding Ltd. plans to sell as many as 24 million shares to diversify its investment portfolio.

Sotheby’s (BID) : The publicly traded auctioneer of fine arts and collectibles said fourth quarter profit fell 26 percent as sales slid.

Westport Innovations Inc. (WPRT) added 3.8 percent to $42. The developer of natural-gas engine technologies reported a third-quarter loss of 30 cents a share, narrower than the average analyst estimate for a loss of 31 cents.

Zumiez Inc. (ZUMZ) : The retailer said comparable store sales rose 14.2 percent in February, beating the average analyst estimate of 5.3 percent.

Gapping up 

MEMS +14.8%, PEGA +10.9%, VE +9.6%, HSFT +7.8%, FXCM +5.7%, BWC +4.9%, RST +4.3%, VVUS +3.9%, WPRT +2.5%, BCS +1.9%, DB +1.4%, BAC +1%,

DXPE +1%, ARMH +0.4%,  UN +1.2%,  PATH +4%, CCO +7.6% ,  FSLR +2.6%, YGE +1.8%, TSL +1.2%, DEXO +17.7%,  VE +10.9%, HSFT +10.7%,

HL +1.4%, GLD +1.4%, BBL +0.8%, SLV +0.7%, AUY +0.6%, NBG +4.9%, BCS +2.8%, DB +1.4%, BAC +1%, HBC +0.9%, RBS +0.7% ,

Gapping down

FNSR -10.7%, STV -9.3%, BID -4.7%, KRA -3.6%, GPRE -3.5%, MBI -2.6%, DAR -2.4%, PETM -2%, RIMM -3%,  SD -1.8%, WAG -1.1%, CME -0.5% ,  SHS -9.4%,

SPPI -2.3%, BSFT-1.7%,

Source

Automatic Data Processing, Inc. (NASDAQ: ADP) Started as Buy at UBS.

First Solar Inc. (NASDAQ: FSLR) Maintained Buy but cut target to $50 at Argus.

Fusion-io, Inc. (NYSE: FIO) Started as Outperform with $50 target at Credit Suisse.

Herbalife Ltd. (NYSE: HLF) Reiterated Buy and raised target to $76 at Argus.

InterActiveCorp (NASDAQ: IACI) Raised to Buy at BofA/ML.

MasterCard Inc. (NYSE: MA) Started as Neutral at UBS.

Paychex, Inc. (NASDAQ: PAYX) Started as Buy at UBS.

ProAssurance Corp. (NYSE: PRA) named as Bull of the Day at Zacks.

SandRidge Energy, Inc. (NYSE: SD) Cut to Sell at Canaccord Genuity.

Trinity Industries, Inc. (NYSE: TRN) named as Value stock of the day at Zacks.

Ultra Petroleum Corp. (NYSE: UPL) named as Bear of the Day at Zacks.

Visa Inc. (NYSE: V) Started as Neutral at UBS.

Walgreen Co. (NYSE: WAG) Cut to Underperform at BofA/ML.

Wendy’s Company (NYSE: WEN) Cut to Neutral at Janney.

In Play

On the Wires

Continuing claims: Prior 3392k, Market Expects 3425k, Actual 3400k

Personal income up 0.3%

Personal spending up 0.2%

Federal Reserve Chairman Ben Bernanke on Wednesday offered a tempered view of the U.S. economy, pouring cold water on the notion recent upbeat signs herald a stronger recovery.

Bernanke told Congress that unless growth accelerated, the unacceptably high U.S. unemployment rate would not keep dropping.

But he stopped short of signaling further Fed bond purchases, dashing the hopes of some traders in financial markets who were betting on more monetary stimulus.

“The job market is far from normal,” Bernanke said.

“Continued improvement … is likely to require stronger growth in final demand and production.”

The swift decline in the U.S. unemployment rate in recent months, to a three-year low of 8.3 percent in January from 9.1 percent in August, has surprised economists both within and outside the Fed given the economy’s relatively soft performance.

Last year, the economy expanded only 1.7 percent, although the fourth quarter proved to be the strongest.

“The decline in the unemployment rate over the past year has been somewhat more rapid than might have been expected, given that the economy appears to have been growing during that time frame at or below its longer-term trend,” Bernanke told the U.S.House of Representatives Financial Services Committee.

Bernanke’s tentative outlook knocked the Dow Jones industrial average below the symbolic 13,000 level it had closed above on Tuesday. The Dow closed off 53 points, or 0.4 percent.It is up 2.5 percent on the month.

Stock prices had been marching higher all year on optimism about gathering economic momentum.

While Bernanke’s tenor was dovish, the lack of a direct allusion to the possibility of a third round of so-called quantitative easing also undercut prices for government bonds and pushed the dollar up. Gold prices slumped
3 percent, their biggest one-day drop in 2-1/2 months.

“Bernanke implied that the Fed was no closer to QE3 …Investors were disappointed,” said Cary Leahey of Decision Economics in New York.

Read more:  

Young adults suffer a 46% jobless rate….

“(Reuters) – The euro zone’s manufacturing sector contracted for the seventh straight month in February, with factories in the bloc’s struggling indebted states facing some of the toughest conditions on record, a business survey showed on Thursday.

It looks increasingly possible that the 17-member euro zone is stuck in a mild recession, as new orders continued to fall and backlogs of work dry up, even in the region’s most healthy economy Germany.

Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) rose to 49.0 last month from January’s 48.8, in line with a flash reading but has now been below the 50 mark that divides growth from contraction since July.

“Whether the euro zone will sink back into recession in the first quarter remains highly uncertain. The periphery remains the major concern,” said Chris Williamson, chief economist at data provider Markit.

The data comes a day after the European Central Bank’s latest half-trillion euro cash injection into the euro zone’s banks.

The funds have helped stabilize sovereign bond markets in countries such as Italy and Spain but accompanying austerity programs appear to have delivered a further blow to growth….”

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“BEIJING—China has made a sharp shift away from purchases of U.S. securities, slashing the dollar’s share of the country’s foreign reserves in what may signal a change in strategy for managing the massive cash pile, Dow Jones calculations indicate.

The portion of China’s reserves parked in the U.S. appears to have sunk to a decade-low 54% as of end-June from 65% in 2010 and 74% in 2006, according to the Dow Jones calculations. The calculations are based on data on China’s holdings of U.S. securities from an annual U.S. Treasury survey…”

Full article

TGT same store sales up 7%

M same store sales up 4.6%

Update

Source

A streak we’ve been watching for awhile is the current run of days without the S&P losing 1%. The last time it happened was in late December.

The streak continued today, and as Conor Sen observed on Twitter, the last time the market went all of January and February without a 1% or more down day was in 1995 (we just confirmed that stat on our own).

Anyway, that year the market gained a ridiculous 34%.

Not only that, it was a freakin’ straight line — or at least as straight of a line as you’ll ever seen

FRED

So yes, the market can just go up in a straight line for a long time.

And the last time before 1995 that the market started the year this way,was in 1964, and that was a pretty good year as well.

Read more: http://trade.cc/arqo#ixzz1nryvh2R1

“Last week Rick Santorum called the President “a snob” for wanting everyone to get a college education (in fact, Obama never actually called for universal college education but only for a year or more of training after high school).

Santorum needn’t worry. America is already making it harder for young people of modest means to attend college. Public higher education is being starved, and the middle class will shrink even more as a result.

Over just the last year forty-one states have cut spending for public higher education. That’s on top of deep cuts in 2009 and 2010. Some, such as the University of New Hampshire, have lost over 40 percent of their state funding; the University of Washington, 26 percent; Florida’s public university system, 25 percent.

Rising tuition and fees are making up the shortfall. This year, the average hike is 8.3 percent. New York’s state university system is increasing tuition 14 percent; Arizona, 17 percent; Washington state, 16 percent. Students in California’s public universities and colleges are facing an average increase of 21 percent, the highest in the nation.

The children of middle and lower-income families are hardest hit. Remember: The median wage has been dropping since 2000, adjusted for inflation.

Pell Grants for students from poor families are falling further behind; they now cover only about a third of tuition and fees. (In the 1980s, they covered about half; in the 1970s, more than 70 percent.)

Student debt is skyrocketing – the New York Federal Reserve Bank estimates it at $550 billion. Punitive laws enforce repayment, and it’s almost impossible to shed student loans in bankruptcy. There is no statue of limitations for non-repayment.

And yet, Santorum’s rant notwithstanding, good-paying in America are coming to require a college degree. Globalization and rapid technological change are putting a premium on the ability to identify and solve new problems. A college degree is also a signal to prospective employers that a young person has what it takes to succeed.

That’s why the median annual pay of people with a bachelor’s degree was 70 percent higher than those with a high school diploma in 2009 (the latest Census data available)….”

Full article

Some chart porn showing how the consumer fared in past recessions and what we might expect going forward….

Update:

“(Reuters) – Bank of America Corp is planning to introduce a monthly fee for its customers holding checking accounts unless they agree to bank online, buy more products or maintain certain balances, the Wall Street Journal said.

The report on the new fee initiative at the nation’s second-largest bank comes after it had faced a major consumer backlash last year when it disclosed plans for a $5-per-month debit card fee, forcing the bank to drop the plan.

Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an “Essentials” account, the paper said.

The options being tested include monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with the bank, the Journal said, citing a memo distributed to employees….”

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“DETROIT (Reuters) – Ford Motor Co may lose up to $600 million in Europe this year as the ongoing debt crisis hurts overall auto sales in the region, Chief Financial Officer Lewis Booth said on Wednesday.

Industry-wide sales in Europe appear to be heading toward 14 million vehicles this year, Booth said. This represents the low end of Ford’s annual sales forecast for the region.

“We’ve seen Europe get off to a tough start,” Booth told reporters at Ford’s global headquarters inDearborn, Michigan. “We think Europe is much more likely now to be at the bottom end of the scale.”

If that happens, Ford is likely to lose between $500 million and $600 million in the region. A loss of that magnitude would dwarf the $27 million Ford lost in Europe last year.

But Booth said Ford was confident in its overall profit outlook for the year because it expects strong results in North America, where auto sales are on the rise.

“We feel OK about the guidance we’ve given for the total company,” Booth said. ”

Read more

The dollar is trading @ 78.74 of about 10 cents

The Euro is off a wee bit trading @ 1.3317 of by 0.0008

The yen is strong @81.061

Yields fell across the region while France and Spain got off auctions without any problems…

No baby sitters for Greece….