“U.S. stocks climbed on Monday led by gains in technology shares and Friday’s robust jobs data, which gave investors heightened confidence that the U.S. economy remained strong,” Medha Singh reports for Reuters. “The iPhone maker was valued at $935.06 billion as of Friday’s close, inching its way towards becoming the first publicly listed company worth $1 trillion, ahead of its annual developers conference.”
“The three main indexes were rising for the second consecutive session after Friday’s data showed jobs and wage growth for May beat expectations, with unemployment rate falling to an 18-year low,” Singh reports. “‘Economic data has been getting quietly better amid the sort of headline chaos,’ Tom Essaye, founder of investment research firm Sevens Report said. ‘“The market has been focusing on those fundamentals and there has been a resiliency in stocks in the past couple of weeks because of better economic data and tame inflation.'”
“At 11:20 a.m. EDT the Dow Jones Industrial Average .DJI was up 180.62 points, or 0.73 percent, at 24,815.83, the S&P 500 .SPX was up 7.51 points, or 0.27 percent, at 2,742.13 and the Nasdaq Composite .IXIC was up 21.15 points, or 0.28 percent, at 7,575.49,” Singh reports. “Ten of the 11 main S&P indexes were trading higher.”
Read more in the full article here.
MacDailyNews Take: Apple’s inching toward $1 trillion!
SEE ALSO:
Can Apple shares end their losing streak? – May 30, 2018
Go go go $AAPL to the moon.
Under Obama the unemployment rate went down every year 7 out of his 8 years in office. But that didn’t stop the GOP from calling it fake numbers. Trump inherits Obama’s declining unemployment numbers and suddenly they’re not so fake anymore.
The unemployment rate means nothing considering home ownership is over a 50 year low. Almost half of Americans have little to nothing saved for retirement. Consumer credit card debt is at a record one trillion dollars yet retail stores keep closing. Sears had about 4,000 stores in 2011. Today they have a little over a 1,000 and are still closing stores. 2018 is on track for record number of retailer closing with record setting 2017 & 2016.
Let’s add a little perspective and context.
UE (unemployment) was 5% in 2007 under Bush. Economy went in the toilet starting the next year and UE went up. 2009 UE was 9.9%. Took Obama his whole 2 terms to get UE back down to 5% (8 long years and negative or little growth).
The public has always called UE numbers fake for various reasons. But, assuming the statistic is still measured the same way, UE is now 3.9% under Trump. Last time it was that low was 1969.
Obama’s recession should have lasted only 3 years. Instead, it lasted much longer (due to terrible government reactions and poor policies) and I don’t recall any news outlet reporting how great the recovery was. All I heard was it is the “New Normal”.
The only credit Obama gets for today’s great economy is letting it recover so slowly that the next president gets the credit. I’d call that poor planning if Obama wanted a legacy to talk about. I call Obama a poor president.
Although it’s been said many times, many ways…
The stock market is not the economy.
The more shares Apple buys back, the longer it will take for Apple’s market cap to reach $1T. I’m willing to wait because a $1T market cap only amounts to bragging rights. I’m in for the dividends.
Mathematically share buybacks have Zero effect on market cap.. …
This seems to be a very common misunderstanding.
The only two factors effecting market cap:
Earnings
PE multiple ( psycological/perception factor )
Buybacks do nothing for cap…. they help the stock price given a pe ).
Reduced # shares=higher eps
Increased # of shares = lower eps
Imo, the misunderstanding/ confusion comes from EPS effect …..
Lets follow the equations.. i think it will become clear.
First and foremost before anything else :
1) Market cap = PE X EARNINGS . Number of shares is irrelevant .
But Also
2)Market cap = Stock price x number of shares .
3)Stock price = earnings / number of shares x PE. Or EPS /PE
Substituting stock price in the 2nd equation.
Market cap=( earnings/ number of share x PE ) / number of shares >>>. Number of shares cancel out in the equation. And we are back to
Market cap= Earnings x PE
Number of shares is irrelavant to market cap.
Its EPS that is effected by number of shares
EPS= Earnings / number of shares .
So the more the number off shares .. the less earnings per share…. or the less number of shares the higher earnings per share ( for a given earning ).
Basically same pie size but different slice sizes, depending on how many slices u cut the pie in . But at the end the pie is the same size,( pie is the cap )
As Apple buys shares and retires them.. the number of shares decrease…. so the earnings per share ( eps ) increases. Resulting in higher stock price.
But you have to keep in mind that eventhough the stock price is higher now, there are less shares
Less shares x higher stock price = cap
More shares x lower stock price = cap
Buying stock back helps share price to go up… but has no effect on market cap directly. ( mathematically )
For cap to go up… PE and Earnings have to go up.
Number of shares , mathematically do not effect Earnings or PE .
(Psychologically they may or may not )
Buybacks wont mathematically help Apple cap to reach trillion faster.. but it will help share price…..a way of returning cash to shareholders. ( hopeing PE does not move lower )
Hope this clarifies the issue .
I know we’ve discussed this in the past that after the IPO the stock price (changed by buying and selling of stock), shares outstanding and earnings influences every other number used as a measure (PE, MarketCap, EPS, etc.). As such those 3 numbers are never results of calculations from measure numbers but conversely factors used to calculate the measures.
PE ratio as used in your equations make it appear to be a number that can be manipulated directly to effect other measures and numbers but that is only true at the release of IPO. After the stocks hit the market, PE ratio value is at the complete mercy of changes to stock price, outstanding shares and earnings.
Xennex,
Exactly. Market cap = share price x number of shares. Period. Neither of those factors depend on earnings, earnings per share, or the price-earnings ratio. Period. The EPS and PE are calculated numbers dependent on share price; they have no more than psychological influence on price.