America’s first interest rate hike in nearly a decade is here. The U.S. Federal Reserve raised its key interest rate on Wednesday from a range of 0% to 0.25% to a range of 0.25% to 0.5%.
“Perhaps unexpectedly, Apple is seeing big volume surrounding the Fed rate decision,” Jonas Elmerraji reports for TheStreet. “That’s because, with more than 20% of its market cap paid for in cash and short-term investments on its balance sheet, Apple’s treasury management has been a challenging situations during this low-rate environment. Even a small interest rate increase could materially impact just how much income Apple’s mountain of cash reserves throw off.”
“There’s also a technical story brewing in Apple right now. Shares had been in a well-defined uptrend since August, but they violated that uptrend last week,” Elmerraji reports. “That puts Apple’s ability to move higher in question — but it’s prudent to wait and see how the broad market reacts to the Fed decision today before calling the uptrend in Apple officially dead.”
Read more in the full article here.
MacDailyNews Take: Technical, schmechnical. This is like steering a ship. We’ll wait to see how it all shakes out over the coming weeks and months.
Wait for sanity to set in…. then real investors will realise that the only sure bet in a rising interest rate environment is a company that does not depend on debt, because of their cash hoard, which keeps getting bigger, by $100,000’s for every word I write on this blog!!
Then, even the big investors will turn tail and scurry back to Apple Inc., away from the high multiple debt saddled stocks that they have rode while borrowing money was dirt cheap.
Speaking of debt, does anyone know what Apple’s debt/income ratio in the US is since they took out debt (bonds) to pay out dividends in a few quarters?
Eventually quality always prevails and shit floats upon the water to be washed away, the flight to quality cannot be discounted.
Apple is a rock of substance with a diamond core and thats where you want to be invested.
Hike?
Oh yeah, it doubled!
Give me a break.
.
See the hike on a 6 yr time span chart and on a 40 yr time span chart. (According to Australian news outlet from Bloomberg data, so it should not be that bad)
http://www.afr.com/news/economy/monetary-policy/the-fed-hiked-ratesand-the-sky-did-not-fall-in-20151216-glphqd
This will chill the economy. Banks loved free money.