Is $AAPL Dead Money ?

“SAN DIEGO (MarketWatch) — Back in November of 2011, I wrote an article about Apple for MarketWatch. At the time, I stated the following: “The bottom line is this, however; there is currently not a cheaper quality growth stock in the entire market.” In other words, I loved the stock.

I based that opinion on three important factors that I always consider before buying a stock. I like stocks with good long-term and short-term relative strength, a compelling valuation, and a strong stock chart. At that time Apple possessed all three of these characteristics.

Apple’s shares AAPL -1.71% were trading at $363.57 back then. By September of 2012, the shares hit a peak of $705, and I continued to hold my shares here at Gunderson Capital Management. At $705 the shares were not as cheap as they once were, the relative performance was stellar, and the chart was obviously hitting new highs, although it was starting to get extended.

Everyone who owned Apple at that point had a profit in the stock. It was getting hard to find much more demand, as most of had already been satiated. The stock finally started to roll over after a meteoric rise.

As a widely held, big winner like Apple begins to roll over, it goes through several stages of distribution. At first, the correction looks like nothing more than a routing pullback within the primary uptrend. The nervous Nellies and short-term traders are the first ones to head for the exit.
In the past, Apple had always recovered after a bout of profit-taking and marched on to new highs. This time was different, however. By early October, the stock broke below its 50-day moving average for the first time in six months. Early profit-taking then started to escalate into some serious selling. I sold my shares on Oct. 8 at $637 per share…..”

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“Though Facebook still dominates the social-media landscape, Google Plus is quickly gaining a following among savvy job seekers who view the service a useful tool for job search. In fact, with some 343 million members, Google Plus has surpassed micro-blogging site Twitter and is second only to Facebook in its number of “active” users, according to a report by Global Web Index.

As with any social-media network, mastering Google Plus takes a bit of time and experimentation to yield the results you’re looking for. The Undercover Recruiter websiterecently offered these tips (along with several others) to give job hunters a jump start on how to use Google Plus when looking for employment.

• Create a profile on Google Plus: And if you already have one, be sure to optimize it by adding a photo and filling out your profile to give recruiters a better idea of who you are and what you’ve accomplished.
• Use the ‘Circles’ feature to connect with influential people: When you connect with someone on Google Plus, you add them to “circles,” which include categories such as “friends” and “acquaintances” — or you can create your own. The feature can be helpful should you wish to, say, share some posts with friends and other items with only professional contacts. (And be sure to add AOL Jobs to your circle.)
• Engage: Google Plus can be a great way to ask questions of recruiters and HR professionals about the hiring process at specific employers. You might also land an online interview, which can better prepare you for an in-person interview. (You also can join AOL Jobs experts for ourweekly Lunchtime Live hangouts on Google Plus. Each Friday at 12:30 p.m. Eastern time, we discuss career issues with experts, and readers are welcome to join in.)

 

Google Plus can also be helpful if you’re simply looking for job-search advice. As Hannah Morgan of the Career Sherpa website notes, once you’ve set up your Google Plus account, you can instantly add dozens of career experts by simply clicking on the Guides & Gurus (Career) image she’s created below….”

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“The euro has been on a rampage in recent weeks, soaring to a 14-month high against the dollar amid a calming of Europe’s financial crisis.

But many market participants think the move will soon run out of steam.

“I could imagine another 2 to 3 percent for the euro, but I don’t expect a continuous rally,” Joe Corbach, head of currencies at Swiss Global Asset Management, tells The Wall Street Journal.

“We do not expect the euro to go beyond $1.40.”

The euro stood at $1.3554 early Monday, up from about $1.32 a year ago

The European Central Bank (ECB)’s quantitative easing that began last summer has played a big role in quelling the financial crisis and drawing investors to the euro. And while other central banks have stepped up their easing, the ECB has begun to reverse its own, according to The Journal.

But the currency’s strength means trouble for the continent’s exporters, so the ECB may feel pressure to act to halt the euro’s rise….”

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“Star bank analyst Dick Bove of Rafferty Capital Markets says the Federal Reserve’s easing campaign is doing little to boost the economy and is preventing bank earnings from soaring even higher than they already have recently.

“I couldn’t care less what the Fed does,” he tells CNBC. “The Fed has sat there — and I’m a big [Fed Chairman Ben] Bernanke supporter — and they’ve cut interest rates to a level which is crippling bank earnings to some degree and crippling the economy.”

The Fed has targeted the federal funds rate at zero to 0.25 percent.

Bove says that before the Fed embarked on its rate cuts in late 2007, 19.5 percent of Americans’ income came from passive investments. That compares with 12.8 percent now.

“That means they’ve just taken away a staggering amount of money from the elderly population in the United States and put a whole bunch of them on food stamps,” Bove notes. The Fed is making the tradeoff in hopes that it can spark bank lending.

“They didn’t get the bank loans. They just took the money away,” he says. “The second thing they’re doing with this ridiculous interest rate policy is diverting funds to areas of poor return.”

Lenders are interested mostly in loans of less than five years’ duration, unless it’s for junk bonds, because interest rates are so low. “In terms of putting money into long-term projects that are going to generate income, they don’t do it.” But eventually rates go up, “and that’s going to help banks and the economy.”

That’s quite an irony, because historically lower rates have been seen as a boon for banks and the economy, but that was when rates were being cut from much higher levels than what they’re at now…..”

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“Feb 4 (Reuters) – Clorox Co quarterly profit soundly beat analysts’ estimates as a severe flu season boosted sales of disinfecting wipes, and results were helped by a new concentrated version of its namesake bleach.

The company also on Monday raised its full-year sales forecast to an increase of 3 percent to 5 percent, from 2 percent to 4 percent.

The company, which also makes Brita water filters and Burt’s Bees skin care products, said it earned $123 million, or 93 cents per share, in its fiscal second quarter ended Dec. 31. It earned $105 million, or 79 cents per share, a year earlier.

Analysts, on average, targeted 81 cents a share, according to Thomson Reuters I/B/E/S.

Sales rose 9 percent to $1.33 billion, topping the average analyst estimate of $1.27 billion.

The volume of goods sold rose 5 percent…..”

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With pensions being largely underfunded one could say this is a good thing. On the other hand is this hurting cap ex and job creation?

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“A recently discovered new form of Android malware called DroidCleaner can not only infect your smartphone, but also targets your PC to spy on you.

Researchers at the security firm Kaspersky Labs have uncovered new malware which poses as a “cleaner” app — or an app used to free memory on Google’s OS — in the Google Play app store. Once an Android user downloads the app, the malware infects the users smartphone and can also be uploaded to the users PC if they plug the device into their Windows computer in the USB drive mode.

(Read More: Broad Powers Seen for Obama in Cyberstrikes )

While the malware that attacks the smartphone is more sophisticated than the malware that infects the PC, according to Kaspersky, the primary function of the malware that installs on the computer is pretty invasive….”

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“Bank of America has long rued its decision in 2008 to acquire Countrywide Financial, the subprime mortgage giant. To date, the bank has set aside some $40 billion to settle claims of mortgage misconduct that occurred before it acquired the freewheeling lender.

It has been a regular refrain at Bank of America. Last month, Brian T. Moynihan, the bank’s chief executive, told Bloomberg television at the World Economic Forum in Davos, Switzerland, that carrying Countrywide was like climbing a mountain with ”a 250-pound backpack.”

But according to new documents filed in state Supreme Court in Manhattan late on Friday, questionable practices by the bank’s loan servicing unit have continued well after the Countrywide acquisition; they paint a picture of a bank that continued to put its own interests ahead of investors as it modified troubled mortgages.

The documents were submitted by three Federal Home Loan Banks, in Boston, Chicago and Indianapolis, and Triaxx, an investment vehicle that bought mortgage securities. They contend that a proposed $8.5 billion settlement that Bank of America struck in 2011 to resolve claims over Countrywide’s mortgage abuses is far too low and shortchanges thousands of ordinary investors….”

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“U.S. factory orders increased in December even though companies trimmed their orders for goods that signal investment plans.

The Commerce Department said factory orders rose 1.8 percent in December compared to November, when orders had fallen 0.3 percent.

Economists polled by Reuters had forecast a rise of 2.2 percent in factory orders for December….”

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“Consumers have been spending more on gasoline than they have in nearly three decades.

With pump prices at their highest level on record for this time of year, the stage is set for a even greater climb in gasoline prices and expenditures than in 2012. Retail gasoline prices have surged 17 cents in a week to top $3.50 a gallon on average, posting the highest prices on record for the beginning of February.

According to AAA, the national average price of regular gasoline is $3.52 a gallon, 4 cents higher than the average price a year ago. The average price was $3.35 a gallon a week ago and $3.30 a gallon a month ago.

Meanwhile, the U.S. Energy Information Administration reported Monday that gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4 percent of income before taxes. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Gasoline prices averaged $3.63 a gallon in 2012, according to EIA.

Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures, according to the EIA….”

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“Angela Merkel told Spain’s prime minister on Monday she had full confidence in his government’s ability to push through reforms, brushing aside a growing corruption scandal in Spain which has prompted calls for Mariano Rajoy’s resignation.

The scandal has hit just as 57-year-old Rajoy, who had a reputation for being boring but clean, appeared to make some headway in tackling the country’s deep financial crisis.

“We have a relation of full trust in the Spanish government,” Merkel told a joint news conference with Rajoy in Berlin, adding she believed Madrid was fully focused on driving down unemployment and pushing through structural reforms

“I am convinced that the Spanish government and Mariano Rajoy as prime minister will be able to sort out these problems and the German government will support them with all of its powers.”

Rajoy repeated his assertion made over the weekend that he not done anything wrong…..”

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U.S. equities got off to a weak start all in part due to political corruption worries in Europe. Specifically, Rajoy in Spain and other cabinet members have been accused of being on the take and their are calls for his resignation. This is creating fear that perhaps the recent bailouts and structuring of finance could fall apart. As well all the plans put forth recently to help Spain recover and grow are considered to be up in the air.

Yields in Spain and Italy have gone parabolic. U.K.’s chancellor is calling for a portential break up of the banks if they can not follow recent guidelines to fixing the mess within the system.

Merkel has tried to calm the markets holding a meeting with Rajoy and stating she has confidence in Spain…

So far the DOW is off 110 and it does  not appear to be more than a garden variety pullback, but we will not know until the close. The S&P is haning onto 1500, but should find strong support between 1470 -1480 if we are to have a continued sell off in the coming days and weeks.

Risk off has most equities down along with precious metals and oil.

Market update 

European markets

[youtube://http://www.youtube/watch?v=iZV7akaSo0s 450 300]

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NYSE

NASDAQ

AMEX 

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BRCM, CAVM, CVX, CONN, CPA, ERIC, GOOG, HSY, IP, MPEL, MRK, RIMM, STJ, UTI, VOD, WMT, YHOO, DB, CS,

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In Play ,

On the Wires 

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“With the various market indices pressing near all-time highs, this might seem obvious, but this is a key point from Goldman Sachs Asset Management chairman Jim O’Neill regarding market valuations.

This is from his latest Viewpoints letter.

…I would also like to mention, is according to one of the more cautious valuation techniques I have learnt to follow, so called CAPE (Cyclically Adjusted Price Earnings), the US market is certainly not cheap today, and neither are Australia nor Mexico (see table below). Such a cautious approach does not mean these or any markets will stop rallying but it is a sign to be careful and that these markets could be especially vulnerable to disappointing and surprising news….”

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BA, CVX, HUM, DELL, BBRY, WMT, MSFT, HLF, GOOG, YHOO, WTSLA, KMX

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” NEW YORK (New York) – Herbalife HLF -9.61% , the nutritional products distributor, is under scrutiny by the Federal Trade Commission, according to the New York Post. The report said the FTC has received 192 complaints against the firm in the last seven years. Billionaire hedge fund manager Bill Ackman, CEO of Pershing Square…”

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“SAN FRANCISCO (Reuters) – Borrowing by small U.S. businesses rose marginally in December, eking out a tiny gain for the year and suggesting headwinds for economic growth for the first few months of 2013, a report on Monday showed.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, rose to 112 from an upwardly revised 111.1 in November, PayNetsaid.

Borrowing was up just 1 percent from a year earlier.

PayNet had initially reported the November figure as 108.3.

PayNet founder Bill Phelan, located in Chicago, said the index suggests small businesses “haven’t come out of their shell.” PayNet’s lending index typically correlates to overall economic growth one or two quarters in the future.

“It’s underwhelming,” he said. “The next two to five months are going to be pretty slow.”

Small businesses are often responsible for the bulk of new job creation after recessions. The recent recession ended in 2009, but sluggish growth has meant weak job growth, and unemployment in January rose to 7.9 percent….”

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“(Reuters) – Guaranteed Rate, Inc, a home loan company, opened shop in 2000 in Chicago with a single office. Now it is one of the 20 biggest U.S. mortgage lenders, with more than 140 offices.

Most of that growth has come in the last two years and Chief Executive Victor Ciardelli said in an interview he is not planning to slow down.

“We’ve hired over a thousand people over the last year and we’re trying to hire a ton more,” Ciardelli said.

Guaranteed Rate is one of scores of independent mortgage lenders and community banks pushing up through the rubble of the housing collapse, as profits rise amid improving demand for home loans for new purchases or mortgage refinancing. They are winning business from banks such as Citigroup Incor Bank of America Corp that have retrenched after the financial crisis.

The five biggest U.S. mortgage lenders controlled just 53.2 percent of the market last year, down from nearly two-thirds in 2010, Inside Mortgage Finance data shows. As small lenders grow, that share could shrink to 40 percent of the $1.8 trillion mortgage market by 2014, a recent FBR Capital Markets report forecast.

The rise of smaller lenders is a boon for consumers. Several smaller lenders said lower costs, low interest rates and their faster processing times allowed them to be more aggressive on pricing than the bigger banks….”

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