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The Fate Of The Bursting Tech Bubble Is In The Hands Of Just One Company
In a world in which everything is up if only one excludes all the things that are down, a favorite pastime of "strategists" has become announcing how high S&P500 earnings would be if only one excluded energy companies... and the impact of the dollar... and China's economic slowdown... and the Emerging Markets currency crisis... and the [cold|hot|just right] weather... and rising labor costs... and everything else that stands between revenue (non-GAAP of course, just ask Tesla) and the bottom line.
What if one does the inverse: what if instead of eliminating the worst performing sectors (and all other factors that detract from performance in a priced to centrally-planned perfection world) one eliminates the biggest company in the world, Apple?
The result is troubling. As can be seen in the chart below, when it comes to second quarter earnings, Apple made all the difference in the world, literally, between gains and losses for what was otherwise one of the "best" performing sectors. In fact, AAPL provided a whopping 6% swing in IT sector EPS for Q2, pushing them from down 1.5% Y/Y without AAPL to +4.4% with AAPL.
Q2 is now in the past, with everyone focused on Q3. What can one expect here?
According to Factset "Apple is currently expected to be the largest positive contributor to year-over-year earnings for the Information Technology sector for Q3 2015." The bad news, however, is that for the first time in over two years, without and with the contribution of AAPL, the IT sector will post a year over year decline in EPS, the first Y/Y drop since Q2 2013 when it was AAPL that dragged infotech EPS lower. As for earnings excluding AAPL, forget it: "the estimated earnings decline for the Information Technology sector is -0.4%. Excluding Apple, the sector would report a year-over-year decline in earnings of -5.9%."
As Factset further adds, it really is all about AAPL: "As of today, if Apple reported actual EPS equal to or above the mean EPS estimate, it would mark the 5th consecutive quarter that Apple has been the largest contributor to year-over-year earnings for the Information Technology sector."
But the worst news comes in the fourth quarter: "year-over-year comparisons for iPhone sales become more challenging in Q4 2015. Sales for the iPhone are projected to be down slightly (-1%) in Q4 2015. As a result, the magnitude of Apple’s contribution to year-over-year earnings growth for the Information Technology sector is expected to be much smaller in Q4 2015 relative to recent quarters."
So while Q3 tech EPS with AAPL could be a nailbiting toss up, with the final number potentially even ending in the green, in the fourth and final quarter of 2015 - the quarter when supposedly the Fed will have hiked - all bets are off and the Info Tech sector, even with AAPL, will post its biggest EPS decline in over two years.
And with the tech sector (read Apple) still the market-driving sector for the entire market, now that we know that this:
... was a bust, let's hope that this:
...and this:
... are just the Hail Marys that the broader market, the broke US consumer, and the hard-landing Chinese economy were waiting for.
Source: Factset
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The iPencil was "Peak Apple"
Fuck Apple!
I just updated a slightly used eight inch Windows tablet I got for cheap on eBay to Windows 10 and it works great.
AAPL: Teh biggest Bitcoin-hater on teh planet!
Worm caught in the ***le ?
There's no iEraser on that iPencil. And you'll probably have to buy the iSharpener separately as an accessory.
The iEraser is sold separately.
The iBillboard would be crazy smart.
I'm also an Apple developer besides being a former TCAS Dev and former warhead command and control Dev too.
Why stop at the iBillboard. How about an iTheater? There's already an IMAX but iIMAX might have merit too.
No. The worm was caught in my zipper today. Hurt like hell too.
iPencil, now there's a creative name.
It's a Number 2 right?
You have two more generations to go. We first will see the updated pencil next summer as the "iPencil S" and then probably late 2016 the iPencil 2 will be released.
Perhaps some are missing my double entendre?
As some are of mine :-)
Is that the response of sarcasim to how Apple does upgrades with little to no value as in "S" or what an Apple Fan boy would say using the past releases of Apple products as a reference.:-)
"It's a Number 2 right?"
Or maybe it's an HB -- for half-baked.
Who else would charge $99 for a pencil that can't even write?
it sure is no. 2
or "jumping the shark"...
By Spring '16 they'll be selling actual apples for $49. People will line up for miles.
Denny's are visionaries then with the iToothpick.
https://twitter.com/DennysDiner/status/641667445569142784
(yes, that is actually Denny's resteraunt mocking it)
Denny's is mocking Tim Cook's Apple? Jesus. Peak apple indeed.
Today Apple felt the need to come out and say phone sales were strong. In the past they wouldn't have bothered. They would simply "beat" the low estimates given by shady analysts on earnings day and all would be well. It's a tell.
Jindal claims anti-Trump strategy is working, Fox host challengeshttp://tinyurl.com/qb4gzlh
Shouldn't that giant iPad read Microsoft Surface on the back? Maybe Timmah should stop sucking Wall Street's dick and consider a little R&D.
Tim Cook iGay
Tech growth was predicated on creating a better future. Well, the future is here and its all iShit......
Not if you live in cyberspace - quick get that VR mask out there!
Two words: automated cars.
In X years, everyone will have to throw away their current driverful cars, and buy new driverless ones.
>>THINK OF THE ECONOMIC IMPACT<<
Oh, and limetless, zero-state energy is just a round the corner, too.
edit: I forgot to mention the impending arrival of uber-sexy hookerbots.
I don't give a shit if they had an app to cure herpes, no one can afford this shit.
They are looking at the wrong end of the fucking horse.
I guess adding phones to mp3 players and changing the size is no longer working for Apple
Apple sucks. They've had to move into financial terrorism to keep the company going.
What are you talking about ? Apples are delicious fruits...
"iPencil"
They missed the boat it should have been the iDildo instead.
Idildo...funny that just made me envison the beating the porn king gives that dude on Lock Stock and 2 Smoking Barrels
Another way of looking at this is to say "Employees at Venture Capital IPO scams are collecting their unearned income at a record pace"
FUCK YOU, FANBOIZ!!!!!! BASTARDS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Hey - as long as there is enough $cash in the bank to complete that giant panopticon in Cupertino...
http://albainternazionale.blogspot.it/2015/09/e-se-viktor-orban-avesse-r...
Immigration Crisis ....
Don't we all mock the financial pundentry when they say things like, "excluding autos.."
I will be eating breakfast in bed with that giant Ipad I just ordered!
That Apple Fanboi who frequents ZH will have a field day with this article/these comments lmao
Maybe having the NSA infect every major US-made technology product with unremovable spyware wasn't the best market strategy.
An apple a day keeps the truth away!
What does that tell you? We have for the time being extracted all the excess profit out of IT that are available. We have displaced as many pencil pushers as possible.
It is like what the blast furnace did to steel. The early furnaces made huge profits. The last entries were in to a commodity business.
So what you have to ask yourself is - where can new large profits be made?
The US is pretty smart to be the first country ending prohibition. Huge profits there. If we get established before the rest of the world they will be buying from us. For a while. Where else? Well cannabinoid medicine will be hammering Big Pharma. And if the US is first? Or a close second?
Well you get the picture.
Any other emerging sectors?
Ah. Well then.
No other emerging sectors. Too bad.
BTW Trump likes med pot 100%. As does about 80% of the American population.
Food upstarts emerging. Kind of.
Chinese still manufacture iShit?
Only as a source of inspiration, now...
iKnow ?
I have three PCs at the house (that I put together myself!) that aren't even powered on -- They're just spares. Tech is reaching saturation.