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"As Goes Apple, So Goes America" - Apple To Replace AT&T In The Dow

Tyler Durden's picture




 

When all else fails...

  • *APPLE WILL JOIN THE DOW JONES INDUSTRIAL AVERAGE, WSJ SAYS

Prepare for unknown craziness as the world's largest and most-owned stock will dominate another index (along with Goldman as we noted previously).

  • *APPLE TO REPLACE AT&T IN DJIA AFTER CLOSE OF TRADING MARCH 18
  • *INDEX CHANGE PROMTED BY VISA 4:1 STOCK SPLIT
  • *S&P: ADDING APPLE TO INDEX TO HELP PARTLY OFFSET WEIGHTING CUT

The reaction...

 

And one analyst's view on why Apple should refuse...

Apple analyst Trip Chowdhry of Global Equities Research doesn't like this morning's news that the company is finally joining the Dow Jones Industrial Average.

 

Here is what Chowdhry said:

 

Apple joining Dow is extremely bad for Apple.... Apple Executive should refuse to join DOW - Joining Dow, takes the shine off the Apple and makes it a rotten Apple

 

Companies in Dow have historically symbolized companies which are boring, have zero innovation, complacent and are inching closer to irrelevance by the day....which is definitely not what Apple is all about

 

Questions for investors, have you seen any innovative company in DOW ... look at the Index, all are struggling to be relevant ... CSCO, IBM, MSFT....next step from Dow is total irrelevance and the possible death of the company... Apple is not a fit for DOW...entering Dow is only for the losing companies and not for highly innovative companies like Apple

 

Apple should just refuse to join the Dow Index...

*  *  *

 

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Fri, 03/06/2015 - 10:07 | 5860967 Headbanger
Headbanger's picture

What will it do to the DJIA "divisor" which is really a multiplier now?

Fri, 03/06/2015 - 10:13 | 5860994 kaiserhoff
kaiserhoff's picture

The DOW is price weighted, not cap weighted, so it matters less than it might.

More to the point, no trading vehicles are linked to the DOW, so it's mostly a show horse.  Fun to watch but irrelevant.

Fri, 03/06/2015 - 10:15 | 5861007 Stackers
Stackers's picture

Is your average falling ?

Simple just replace the numbers used to create that average and Wa-La instant all time high average.

They need to implement this in the school grading system. It will instantly make everyone in America a genius.

Fri, 03/06/2015 - 10:19 | 5861032 NoDebt
NoDebt's picture

The Dow Jones 'Industrial' Average is the world's largest actively managed index.

Fri, 03/06/2015 - 10:36 | 5861104 nuubee
nuubee's picture

I think the lesson here is clear folks. Market a shitty controlled product well enough to be the worlds greatest techno-fashion... then perform lots and lots of controlled stock buybacks to bouy the price of your stock.... then get a position in the DJIA.

Fri, 03/06/2015 - 11:26 | 5861303 3.7.77
3.7.77's picture
"As Goes Apple, So Goes America"

I thought that was Government Motors.

Fri, 03/06/2015 - 11:33 | 5861328 J S Bach
J S Bach's picture

"Go 'head, bite the big AAPL, don't mind the maggots!  Uh huhhhhh."

Fri, 03/06/2015 - 10:22 | 5861039 Stained Class
Stained Class's picture

Was this news supposed to have been released LAST Friday? Take a look at the 2 point rip in AAPL starting at 9:45 on 2/27.

But why is AT&T being replaced?

Fri, 03/06/2015 - 10:51 | 5861165 Tijuana Donkey Show
Tijuana Donkey Show's picture

Because the carriers are past their peak. Data prices are dropping, devices are expensive, and the new FCC regs are going to damage all that extra fluff ATT ripped people off for. Roaming fees, long distance, data overages, international roaming, home phone, and internet access are all a race to the bottom. Google is opening their own network, watch for more price savagery. I can't wait. 

Fri, 03/06/2015 - 10:56 | 5861178 Headbanger
Headbanger's picture

Bingo..

And I see Firefox now has its own free video calling feature called "Firefox Hello powered by Telefonica"

Fri, 03/06/2015 - 18:00 | 5862914 malek
malek's picture

Excuse me, what?
AT&T, after they bought up DirecTV, is the only company that can overall compete with Comcast who has the choke-hold on really fast broadband, especially for everything not super-dense agglomerations.

As we all know the new FCC regs are going to do everything except providing equal opportunity to internet content providers, so Comcast has a choke-hold on content too!

Fri, 03/06/2015 - 10:21 | 5861044 Headbanger
Headbanger's picture

Doesn't work that way Stacker

The "divisor" is adjusted to match the closing price of the day prior to the switch

Decreasing the divisor further makes the DJIA more volatile for movement of any of its components.

 

Fri, 03/06/2015 - 10:07 | 5860971 Tsar Pointless
Tsar Pointless's picture

Apple down=transitory.

This is unequivocably bullish.

Fri, 03/06/2015 - 10:07 | 5860975 astoriajoe
astoriajoe's picture

 

WTFCGW? WTF Could go wrong?

Fri, 03/06/2015 - 10:07 | 5860977 valley chick
valley chick's picture

This has to be BULLISH!

Fri, 03/06/2015 - 10:35 | 5861098 Never One Roach
Never One Roach's picture

Robust!

Fri, 03/06/2015 - 11:14 | 5861254 Ignatius
Ignatius's picture

So does this move goose the DOW, and conversely, put a hole in the NASDAQ?

Fri, 03/06/2015 - 10:08 | 5860982 Dr. Engali
Dr. Engali's picture

There's the top for Apple. It's all down hill from here.

Fri, 03/06/2015 - 10:11 | 5860990 Katastrofenhausse
Katastrofenhausse's picture
"As Goes Apple, So Goes America"

So, I guess that means we're all going to be making iJunk when we're in those FEMA camps ?

Fri, 03/06/2015 - 10:14 | 5861009 NotApplicable
NotApplicable's picture

Bullish!

Fri, 03/06/2015 - 10:38 | 5861116 Jethro
Jethro's picture

No FEMA camp for me. 

Fri, 03/06/2015 - 10:11 | 5860991 Squid Viscous
Squid Viscous's picture

sign of the top? like the AOL Time Warner deal?

Fri, 03/06/2015 - 10:12 | 5860995 SloMoe
SloMoe's picture

Tomorrow's Dog's of the Dow, today.

Fri, 03/06/2015 - 10:18 | 5861004 buzzsaw99
buzzsaw99's picture

very deceptive. stock in over-indebted T is moar representative of the current overall usa financial condition. However, the previous replacement of HON with C fits the bill quite nicely. The usa is exactly like to dow move to C in every way, moar fraud and debt. lower quality in general.

Fri, 03/06/2015 - 10:26 | 5861060 kaiserhoff
kaiserhoff's picture

The 12 stocks that made up the original Dow Jones Industrial Average in 1896 were American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennesee Coal & Iron, U.S. Leather preferred, and U.S. Rubber.

I see your point;)

Fri, 03/06/2015 - 10:15 | 5861012 Squid Viscous
Squid Viscous's picture

How long until TSLA and NFLX are added?

Fri, 03/06/2015 - 10:21 | 5861042 bullet
bullet's picture

products manufactured in china compose the DJIA... a WTF moment...

Fri, 03/06/2015 - 10:22 | 5861051 scubapro
scubapro's picture

ATT out?   so just the weaker VZ to represent 'communications'.   

aapl is 10% of nasdaq; 4% of sp500 now the Dow.

 

will this make the stock price of apple a national security issue?  

now most indices can be 'influenced' with the options of one name.

 

God help the USA if the iwatch fails!

Fri, 03/06/2015 - 10:28 | 5861070 Bastiat
Bastiat's picture

Biggest problem with the Apple watch - one day battery life because it takes so much juice to run that retina screen. 

Fri, 03/06/2015 - 10:42 | 5861133 WillyGroper
WillyGroper's picture

@Bastiat,

IIRC you had a friend get deathly ill from Dtap as I did when I was told I was getting merely a tetanus shot.

Check the ingredients out of these vaccines.

http://www.cdc.gov/vaccines/pubs/pinkbook/downloads/appendices/B/excipient-table-2.pdf

Fri, 03/06/2015 - 11:02 | 5861207 Bastiat
Bastiat's picture

Yeah, he had some hospital time, lots of specialists, excruciating pain, could barely move one arm.  At one point the assholes wanted to give him chemo, experimentally!  Fortunately he declined.  After almost 2 years, he's getting back to normal.  How did you come out of it.

Fri, 03/06/2015 - 12:11 | 5861484 WillyGroper
WillyGroper's picture

I had tetanus symptoms for 2 days. Within 2 hrs of receiving the vaccine, fever shot up to 104 & stayed with violent uncontrollable whole body tremors. At the injection sight which I took a pic, my arm was inflamed to the elbow. Once I could get out of bed I went back to the Dr. showed him the pic & demanded the vaccine manufacturer & lot number to which he obliged, but charged me for. Sanofi was the devil that made this poison. All he could do was shake his head not knowing what the hell to say. I had another allo doc say the vaccine was doing it's job & I needed it.

IMO, the med schools have been shanghai'd like everything else. They only know what they've been taught, which is maximization of downstream profits going mainly pharma/hospitals, not to mention human guinea pigs. Compartmentalization at it's finest.

I recovered after about 4 days, but who knows what kind of time baum they planted. I cannot believe they wanted to give experimental chemo! After my baptism by fire there's 3 reasons I'll ever see a Dr. again...broken, bloody or infected. Even infected is iffy after learning before the era of antibiotics, probiotics such as chlorophyll were used in surgery.

After personally hearing of medical horror stories (22 yr old, Chrone's/colostomy) ALL preventable, we live in nothing more than a medical mafia paradigm. I'm half way thru a book "A New Breed: Satellite Terrorism In America" that reads like your worst Freudian nightmare. I highly recommend it. Hitchcock couldn't have woven a better thriller. The Dr. (DO/Anesthesiologist) that wrote it is now being targeted by TPTB for writing it. They tried to destroy his career, murder him & his girlfriend, other doctors involved, electronic warfare, think (DC shipyard shooter) w/retired Lt. Colonel involved... Unbelievable. He barely stayed 1/2 step ahead of these serpents.

Fri, 03/06/2015 - 10:37 | 5861107 Jethro
Jethro's picture

Ha, That's what I was thinking now too.  Apple stock price will be an issue of National Security.  Apple products are like carrying around the Eye of Sauron.  NSA can't afford for Apple to tank.

Fri, 03/06/2015 - 14:28 | 5861188 Bastiat
Bastiat's picture

How about the idea that the markets have been s high national security issue for some years?  The interventions seem military at times, naked and bridal.  What the hell, Rickards taught them how to do it.

Fri, 03/06/2015 - 10:37 | 5861113 R19
R19's picture

WALL STREET BUCKET LIST COMPLETE.

Fri, 03/06/2015 - 10:45 | 5861141 orangegeek
orangegeek's picture

Apple effectively controls the NASDAQ100 - 100 issues.

 

Apple will crush the Dow Jones - 30 issues.

 

Much easier for pig yellen to control market - just bid one stock.

 

Let's see that balance sheet you fucking fraudulent animal yellen!!!!!

Fri, 03/06/2015 - 11:03 | 5861209 Jethro
Jethro's picture

I like to think of her as an ambulatory matzo ball.

Fri, 03/06/2015 - 10:52 | 5861168 DrNybble
DrNybble's picture

AAPL in the DOW will mean a great deal of additional volatility.

We've never had an "industry" like it whose entire financial foundation is dependent on products well known for "form over function" and purchased by an almost religious devotion to a brand as a social beacon.
That emotional factor is unstable and will be reflected in AAPL's pricing.

Fri, 03/06/2015 - 11:07 | 5861229 Totin
Totin's picture

So does that mean that AT&T is no longer boring, innovationless, complacent, and inching closer to irrelevance by the day? 

Fri, 03/06/2015 - 11:19 | 5861277 rejected
rejected's picture

That is not the case.... trust me...

Fri, 03/06/2015 - 11:20 | 5861284 yogibear
yogibear's picture

Now China can control the main US stock index.

Fri, 03/06/2015 - 11:24 | 5861294 yogibear
yogibear's picture

China shuts down the Apple plant and watch the company get hit hard.

Fri, 03/06/2015 - 11:25 | 5861296 JRobby
JRobby's picture

It used to be "As Goes GM, So Goes America" but since the purchase of certain GM products will cause you to be incinerated, bypassing the cost of the crematorium...........................

Fri, 03/06/2015 - 11:27 | 5861307 scubapro
scubapro's picture

 

 

so applie is 18% of XLK, the tech sector....yet create no technology; only use it to create consumer goods.

 

when you look up the stock it is in the 'consumer goods' category...but not in XLY...consumer discretionary would be the most appropriate.   

Fri, 03/06/2015 - 11:29 | 5861315 rejected
rejected's picture

Not a good sign for at&t when you are replaced by basically a Chinese manufacturer in disguise.....

Fri, 03/06/2015 - 11:37 | 5861349 Father Lucifer
Father Lucifer's picture

With Jobs gone Apples days of inobation are most likely ober, as will be their product quality and profits, therefor they belong in the DOW with Microsoft et al.

Fri, 03/06/2015 - 12:05 | 5861461 Agent P
Agent P's picture

This Chowdhry fella sounds like more of an Apple fanboy hipster doofus than Andrew Ross Sorkin.

Fri, 03/06/2015 - 12:16 | 5861507 JR
JR's picture

How do you spell Dow? L.I.E.

The key point to remember is that the Dow Jones has become the popular major media gauge of the health of the economy. And this gauge is propaganda because it represents the volume of the transfer of wealth from the American middle class labor to the banks who then buy US equities whose exploding returns compete with the devalued purchasing power of the man on the street.

The Dow Jones has become the symbol of destroyed permanent reserves in America and the Las Vegas casino for the Fed-backed risk takers.

Remember this from Tyler 9/10/2013?

Dow Jones To Kick Out Losers From Index: Alcoa, Hewlett, BofA Out; Replaced With Goldman, Nike And Visa

“In what has become an unspoken tradition for the Dow Jones, which maintains its upward bias by kicking out underperformers and replacing them with the investor darlings du jour, we just learned that as part of its next three-for-three rebalancing, the first since 2004, the DJIA will kick out such recent losers as Alcoa, Hewlett Packard and Bank of America, and will be replaced with Goldman, Nike and Visa:

  • ALCOA, BANK OF AMERICA, HEWLETT-PACKARD TO LEAVE DJIA
  • GOLDMAN SACHS, VISA, NIKE TO JOIN DJ INDUSTRIAL AVERAGE
  • CHANGES WERE PROMPTED BY THE LOW STOCK PRICE OF THE THREE COMPANIES SLATED FOR REMOVAL

“What, no inclusion of Apple, Tesla or Netflix? Also, for those keeping track, there are now 10 ‘industrials’ in the 30 company index that make, well, nothing. And how soon until the entire DJIA becomes one daily rebalanced ETF, which has as constituents only stocks that have traded up 5% or higher on the prior trading day?”

“When Dow created his first Average (now the Transportation Average [1886]), he simply divided the total of all the prices by eleven (the number of stocks on the Average) to get his result.” -- Randy Befumo

Now, instead of a divisor being the number of stocks on the Average (30), the current Dow Divisor is 0.15571590501117 as of October 21, 2014 … It's no longer an average. An average is @sum divided by @count. Read this to see how they do the math. Then ask yourself, Is the Dow a definition of a fraudulent investing scam, a financial Ponzi Scheme?

https://drive.google.com/file/d/0B51-74tGswAXcTY0b3hxNlBUeGM/view?usp=sh...

Dr Benway  is puzzled: “It's kinda strange. We force the market up with money printed out of thin air, destroying the market, then we pretend the ramped prices are ‘market prices’ and indicative of value.

“Also, prices are assumed to be ‘market prices’ even if a handful of holders hold 95% or more of the company. This is great for fund managers, as they can ramp these shares and then claim great performance based on unrealized gains.”

Fri, 03/06/2015 - 12:39 | 5861608 Atomizer
Atomizer's picture

Tim Cook iGypsy backdoor index to rally short term ETF gains.

Fri, 03/06/2015 - 14:15 | 5862009 conspicio
conspicio's picture

Huh huh huh...Beavith...he thaid "Tim Cook" then "backdoor" in the thame potht...huh huh huh...backdoor...tim cook...huh huh huh...

Fri, 03/06/2015 - 12:40 | 5861617 windcatcher
windcatcher's picture

“As goes GM, so goes America” Down the fucking drain!

Fri, 03/06/2015 - 15:26 | 5862317 Element
Element's picture

 

 

"As Goes Apple, So Goes America"

 

Shouldn't that be, "As Goes Apple, So Goes China"?

 

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