Blow-Off Top? Or Just Another Run-Stop? AAPL 12% Drop!

Tyler Durden's picture

Reporting after hours are:

MSFT (link):

  • EPS beats $0.76, Exp. $0.74,
  • Revenue misses $21.46 bn vs $21.64 bn estimate
  • Q2 Window revenue $5.88 billion
  • Microsoft reaffirms fiscal year 2013 operating expense guidance of $30.3 billion to $30.9 billion.
  • Entertainment and Devices Division posted revenue of $3.77 billion, down 11% Y/Y - need XBOX 1080 now?

AT&T (link)

  • EPS misses $0.44. Exp.$0.45
  • Revenue beat $32.58 bn vs $32.24 bn estimate
  • Sees 2013 Revenue growth of 2%, capital spending in $21bn range
  • In the quarter, the company activated a record 8.6 million iPhones, with 16 percent new to AT&T
  • Says 31.7 million, of all smartphone subscribers, are on usage-based data plans vs 22.1 million a year ago
  • May complete $300MM buyback as early as mid-year

Starbux (link)

  • EPS of $0.57 inline with expectations
  • Revenue misses $3.8 billion vs $3.84 bn estimate
  • Sees 2013 year end EPS of $2.06-$2.15, Exp. $2.16
  • Q1 comps up 6%, expects slight operating margin improvement in the Americas and EMEA segments
  • Forecasts some operating margin contraction in China/Asia Pacific, driven by the shift in equity mix towards company-operated stores as well as costs associated with accelerated store growth in China.
  • Capital expenditures of ~$1.2 billion for the full year

* * *

Amid the deafening screams of hundreds of hedge fund managers looking for any hedging port in an AAPL storm, stock indices (expect the Nasdaq) surged to new highs from the moment the US day-session began until POMO was complete and European markets closed. Volume and block size was large as we took out S&P 500 highs up to 1500 and it appeared we ran out of the short-term proverbial great fool. In general, risk-assets and stocks were well correlated though the big disconnect today was a rising VIX. HY Credit did not play along with the exuberance early on either - as it seemed relatively clear that any and every trick in the book was being used to enable more out of the AAPL boat as we ramped up to VWAP. Once Europe had closed, AAPL slid, stocks slid (with S&P 500 dropping its most of 2013 so far), and risk-assets in general slid lower. JPY weakness and EUR strength helped support risk but Treasury yields falling back and a drop in commodities overall (Gold -0.9% on the week) had the opposite effect. The typical late-day ramp failed despite the best efforts of vol compression as stocks closed almost unch, at VWAP, in line with risk-assets (ahead of tomorrow's LTRO news). AAPL at lows as ramp failed...


S&P 500 futures took off from the day-session open, topped at end of POMO and European close, retraced it all... then levitated back to VWAP close...


Early on it was HY Credit and Vol that ignored stocks (as FX and rates markets tracked it higher and back down)... They tried to ramp HYG to keep things alive into the close - but VXX, TLT, and SPY all recoupled by the close...


AAPL retested its early morning lows as we closed...


VIX made a decent run back lower in the late-day as every effort was tried to lift stocks...


Commodities were weak - odd given USD weakness. Gold and Silver weakness suggests margin calls perhaps on AAPL-based holdings...


But across broad risk-assets in general, today saw no major disconnect as risk correlations picked back up once again in their systemic way...

Completing the humor is the epic collapse in the Yen today, which after soaring on the disappointing open ended BOJ intervention which is very much unopen for another 11 months until 2014, today for some reason decided to plunge back to levels worse than when the BOJ disappointed the market. USDJPY down 2.6% in 20 hours:


Charts: Bloomberg and Capital Context

Bonus Chart: SPX/VIX appears to have hit an interesting level of exuberance...


Bonus Bonus Chart: Post-QE3, The Dow Transports are up 12.25%, Nasdaq down 1.7% and the S&P and the Dow up around 1.8%...


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HedgeAccordingly's picture

Absolute ludacris price action today.. VIX was bid up by retail and CNBC cheerleading 


but roubini still bearish - Roubini from Davos: "problems are global, but policies are national {Video} |

Spastica Rex's picture

If only we could have global policy...

James_Cole's picture

R: "...interdependence implies that problems are global, but policies are national. Coordinating among different countries will be increasingly difficult. It leads to political, economic and financial tensions like currency wars that can lead eventually into protectionism."

Sounds a lot like the reasoning that lead to TBTF. If there's problems in the system, just make it bigger!

Proofreder's picture

Sympathy for the Devil 

by Mick

Frastric's picture

Thursday Apple Thursday...

Frastric's picture

S&P at 1600 then the end, the S&P has this ridiculous thing about breaking new highs when the writing is on the wall and then plunge hard, except this time it's going to implode even harder.

Supernova Born's picture

Ralph Wiggum on a slide.



Mad Mohel's picture

$20 that cocksmoke Tim Cook is in a mirror somewhere trying to do his best Jobs impersonation.

Nid's picture

They still managed to shithammer Vix Futures into the close....the day of reckoning is nigh.

walküre's picture

yes and AAPL longs are still looking for an exit

no bounce

redpill's picture

I love the smell of momo panic in the morning.

redpill's picture

It's such a convenient allegory; the apple starts as a small bud on the tree, growing many times its original size into a beautiful, shiny, lucious commodity.  But once it gets too big it falls to the ground, where it rots and is eaten by worms.


Lohn Jocke's picture

If only the allegory were about a kitty cat instead, then we might get a dead cat bounce. Doesn't look like it though.

Joe moneybags's picture

Redpill, that's not an allegory: its the story of each of our human lives on earth.  Kind of depressing, actually.

redpill's picture

Oh please, real life is much more depressing than that.  We spend way less time on the tree and much more time on the ground rotting, when you think about it.  So let's just stick to the apple, hmm?

CPL's picture

Let me just put on my beret, light a candle, light a gauloise and put on sun glasses.  Oh yeah, music.


Now I shall read you poems and complain about the waiter.

Supernova Born's picture

Out with the old, in with the mold.

Mold gotta eat, same as worms.

12ToothAssassin's picture

Live fast, die young and leave a beautiful corpse.

LongSoupLine's picture

I don't see real apples getting any hot fucking Fed juice injections.  If that were the case, real apples would be the size of fucking watermellons, and the tree would represent the fucking middle class taxpayers holding all that fucking weight up on the branches.


Fuck you Ben, asshole.

redpill's picture

Be patient, Monsanto is working on it :)


youngman's picture

I thought it was a wierd day too....dumping PM´s for Netflix??????....people are pessimistic..but they are all in the market?????

Just another stinky Swiss day in the Alps

CPL's picture

Dramatic panoramic mountian views...pfft.

<adjust beret, simulatiously light four more gauloise to make sure smoke cloud is thick enough to kill small animals and children.  Then complain about the sunset and flag the waiter>

zerozulu's picture

Friday closing will be nothing but blood bath.

Essential Nexus's picture

FB looking like a good short again soon.

Water Is Wet's picture

FYI, those numbers Tyler posted at the top are of the bullshit, "this is something CNBC would report" ex-items variety.  AT&T lost $0.68 per share.  If you believe that AT&T, like Verizon, will be able to dump their entire pension fund on the government, then go ahead and report an "ex-items" number.  Otherwise the two companies have lost $8.1 billion collectively this quarter.

Freddie's picture

Losing only $8.1 billion is good - right?  Obam lost 4 times that on GM.  That was good too.  Bullish!  Forward!

Joe moneybags's picture

I'll go with your "blow off top", Tyler, at least for the short term; say 1 -3 months. The Trannie Rocket simply must stop and refuel somewhere on it's vertical trajectory.  And the RUT making all-time highs, is due to give us bears at least a brief reprieve.  But with EBAY, AMZN, SBUX, CRM, LULU, HD, GOOG, LOW, etc. at or near all-time highs, it's hard, and costly, to be bearish.

StoleYourMoney's picture

Every company that matters has missed, bodes well for the future.

Freddie's picture

Good for +300 points on the Dow. 

Companies missing earnings is the "new" bullish!  Forward Soviet!

Kastorsky's picture

no surprise gold sells.

PMs are always pressured around UNemployment BS release dates.

LongSoupLine's picture

Total fucking crooked horseshit.


Fuck you SEC for sitting around and punching your fucking clowns while these wealth destroying assholes fuck us again.  Fuckers.

toomanyfakeconservatives's picture

Who gives a damn? Today I managed to pick up brass 9mm $14.50/50, CCI magnum primers $35/1000, CCI stingers $5.95/50, and H110 powder $14/pound.

EclecticParrot's picture

A little humor for exasperated short-sellers (w/apologies to Randy Newman):


Short sellers got no reason

Short sellers got no reason

Short sellers got no reason to live


They got little pricks

and little eyes

They walk around

tellin' great big lies

They got big ethnic noses

and shiny gold teeth

They make up shit

then proceed to Tweet


Well, I don't want no short sellers

Don't want no short sellers

Don't want no short sellers

round here


Short sellers are not the same

As you and I

(a perma-bull such as I)

They’re mother-fuckers

until the day they die

(it's a wonderful market)


Short sellers got nobody

Short sellers got nobody

Short sellers got nobody

to fuck


They got little baby brains

and love to masturbate

But if you give ‘em a big ‘squeeze’

they’ll capitulate

They got margin call alerts

that go ‘beep, beep, beep’

They’d screw their own mothers

and cheat, cheat, cheat

They got grubby little fingers

and pee in the pool

as they circumvent the Uptick Rule

Well, I don't want no short sellers


Don't want no short sellers,

no fucking short sellers


'round here 

chump666's picture

lol  AAPL buys used to support the Dow.  Now that AAPL is selling hard, the Dow looks fragile.

So while the S&P and Dow have smashed through 2012 highs, the Nasdaq is lagging.  In a total HFT disconnect from reality trade and tight liquidity driven market (DXY bids).  The AAPL and Nasdaq selling is a bearish sign.  I'm watching Asia, namely HK and Shanghai (all overbought) for panic sells and geopolitical issues (Nth Korea being used by China to f*ck with Japan).  Just a reminder, liquidity providers are human, any manic HFT offers as longs get cut...POMO supports will be crushed.


lakecity55's picture

-----------I am in equities big time.

-----------I am investing in something else.

CPL's picture

Bottle caps and broken glass, can't lose.  Thinking of branching out into gum.  Keep it diversified.

Frastric's picture

The horror... The horror...

enloe creek's picture

monday monday can't trust thAt day

enloe creek's picture

monday monday can't trust thAt day