The Federal Reserve was the big focus on in the stock market today. On Wednesday, Chairman Jerome Powell announced there would be no change in rates after the most recent Fed meeting. That was in line with consensus expectations. Further, the group also does not foresee any rate cuts in the next 12 months.
While some investors may view that as bad news — as in, no dovish Fed catalyst — others are viewing it more positively. It shows that the Fed is fairly optimistic on the economy. Given the latest jobs report and where the labor market stands, it’s understandable why the group doesn’t feel it’s necessary to cut rates further.
Apple
Another day, another Apple (NASDAQ:AAPL) bull. Apple’s price target was raised to $290 from $270 at Bank of America. The analysts like what they see, with well-priced wearables and strong demand for the iPhone. While demand for the new phone is solid now, they remain optimistic further out too, with a 5G iPhone expected to drop next year. That should generate unit sales of 200 million or more from calendar year 2020 to 2022.
Building on that topic, analyst Ming-Chi Kuo of KGI Securities, doesn’t think the device will cost consumers significantly more. He say there shouldn’t be a large price increase of the new 5G iPhones next year compared to the iPhone 11 pricing. The price increase should only be about $30-$100, depending on the model, but Apple should be able to cut down costs via supply chain improvements.
The good news for Apple didn’t stop there, as Evercore also upped Apple’s price target from $275 to $305. That’s thanks to the high demand this holiday season for the iPhone 11 and the AirPods.
Of course, it’s worth mentioning that Apple hit a new all-time high on Wednesday.
Movers in the Stock Market Today
The Justice Department’s probes on big tech — covering Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple and Facebook (NASDAQ:FB) — will hopefully be completed in the next year, according to the U.S. Attorney General William Barr. The main focus revolves around antitrust issues, but it isn’t the only concern, apparently.
Comcast’s (NASDAQ:CMCSA) NBC stated that ad sales for the 2020 Summer Olympics in Tokyo have already topped $1 billion, a double-digit incline compared to the eight-month prior mark of the 2016 Olympics in Rio de Janeiro. More than half of those commitments come from new advertisers, too. The cost of ads are ranging anywhere between $1 million and $100 million, with 7,000 hours of coverage.
Kroger (NYSE:KR) and Walgreens (NASDAQ:WBA) are joining forces to save on merchandise costs. The two retailers plan to find overlapping products and combine certain orders. They are hoping other retails join this newly formed Retail Procurement Alliance.
Some parts of Europe are freshly out of Amazon’s newest generation of Alexa. And unfortunately the restocking won’t happen until after the holidays. This comes after having similar issues in North America and Europe last year right before the holidays. This seems surprising for a product and logistics conglomerate like Amazon.
Saudi Aramco got its IPO off the ground, becoming the most valuable company in the world by market capitalization. The Saudi government is trying its hardest to hit the coveted $2 trillion market cap level, and a limit-up 10% rise on the Tadawul, a Saudi stock exchange, is helping. That’s despite a fall in crude oil prices on Wednesday on bearish inventory report.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and GOOGL.
