Wall Street sells off, led by Apple shares amid inflation, rate concerns

U.S. stocks ended sharply lower on Monday, led by declines in Apple and other mega-cap growth shares as the benchmark 10-year yield hit fresh 3-1/2 year highs and investors grew more concerned about rampant inflation and rising interest rates.


Caroline Valetkevitch for Reuters:

The S&P 500 fell below 4,000, with Apple shares the biggest weight on the index, as well as on the Nasdaq.

Investors are worried about how aggressive the Federal Reserve will need to be to tame inflation. The U.S. central bank last week hiked interest rates by 50 basis points.

“Markets are digesting the start of a return to a more normal monetary policy environment,” said Kristina Hooper, chief global market strategist at Invesco in New York.

“Moving more aggressively (on rates) raises the specter of a recession, especially with all of these complications – high inflation, Russia’s invasion of Ukraine, COVID-related supply chain disruptions,” she said.

MacDailyNews Take: Well, we got down to $151.50, but not below the $150 level we’re hoping to see. Maybe tomorrow!

‘Tis best to get a handle on inflation, if you know how, while you still can.MacDailyNews, May 11, 2021

Earlier this year, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”

Inflation is repudiation. — Calvin Coolidge

When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan

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  1. Apple didn’t do that badly today if you compare it to some of the other FAANG or tech stocks out there. Anyway, with the share repurchasing plan in action, Apple is being given a less expensive price to buyback shares. Those daily Apple stock dumpers are actually helping long-term shareholders, so when Apple drops, there’s no good reason to cry about it. Think about all those stocks that are tanking with no buyback strategy in place. That’s a real bummer for those shareholders.

  2. things could get much worse before it gets better. Consider Covid numbers :

    71,742 MAY 08 2022
    42,015 MAY 08 2021

    607 MAY 08 2022
    607 MAY 08 2021

    The only reason the current administration isn’t pushing for lock-down mask mandates is because mid-term election polling says that covid policies are very unpopular. So clearly the current administration is governing based on maintaining power and not what the self proclaimed was in the interest of the American people just a few months ago. The science didn’t change, just the political winds. The current team in charge is incapable of making a single good decision to change the direction of the economy. If by design or incompetence, the current administration will only make matters worse. Also consider, the border crisis, the war with Russia, and the looming showdown with CCP China and things have the potential to get for more worse than better. Covid restrictions and shutdowns could come before or after mid-terms based on political power play. If the Dems look to loose power and control they could enact a shutdown to keep their hands on the wheel.

    But in these dark times, AAPL may be one of the smartest investment opportunities around. Apple is diversified across the globe and extremely good at making insane profits. Hopefully at some point (2024) things will turn around, then AAPl will blow past all time highs. So everyone keep investing is Apple for the long haul… but also make sure you have cash, live below your means and avoid debt.

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