Apple's Best Week in Years; Fed, Jobs in Focus

Solid earnings and a Buffett endorsement lifted AAPL stock

May 4, 2018 at 1:32 PM
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The Dow is set to close a busy week in the red, despite a huge week for Apple (AAPL). The major stock indexes also eked out gains for April, though they seem destined for an upcoming (continued) stretch of rapid, unpredictable price swings. And while the U.S. central bank kept interest rates unchanged, as expected, traders digested the Fed's comments on inflation, which fueled expectations for a June rate hike -- though April payrolls growth fell short of expectations. A rising U.S. dollar also caught Wall Street's attention, and traders continue to keep one eye trained on the Treasury yield curve -- which could have major stock market implications.

Apple Eyes Best Week in Years

Apple stock is set to notch a five-day winning streak, which would mark its longest since February. The stock surged early in the week ahead of earnings, even as option bears were active. The iPhone maker's earnings report ultimately wowed Wall Street, and news that Warren Buffett bought AAPL shares has the equity pacing for its best week since 2011, with the stock fresh off a record high.

Apple Suppliers, FAANG Also Make Noise

Several Apple suppliers also made noise this week, with a handful reporting earnings of their own, including Cirrus Logic (CRUS) -- which dipped after the company's quarterly figures fell short of expectations. Meanwhile, Micron Technology (MU) stock initially tumbled after unfavorable comments from Apple's CFO, but the pullback could be a "buy" signal, if history is any indicator.

Elsewhere, a couple of Apple's fellow FAANG stocks also made noise. Facebook (FB) announced plans to launch a new dating service, which sent Match Group (MTCH) stock plummeting. On the flip side, a new partnership with Google parent Alphabet (GOOGL) sent this fitness stock higher.

Blue Chips Move on Earnings, M&A, 'Avengers' Hype

Apple wasn't the only Dow stock garnering attention this week. McDonald's (MCD) kicked off the week with a strong earnings showing, while pharma concerns Pfizer (PFE) and Merck (MRK) reported disappointing quarterly results. News of a Sprint (S)/T-Mobile (TMUS) merger weighed on telecom stocks, including blue chip Verizon Communications (VZ), and Caterpillar (CAT) was slapped with a nasty bear note. The shares of Walt Disney (DIS), meanwhile, jumped ahead of next week's earnings report, thanks to a strong showing for the latest "Avengers" movie.

Snap, Spotify, Tesla Earnings in Focus

Several other stocks also captured the Street's attention after earnings. This retail stock that had its worst day in months, and Snapchat parent Snap (SNAP) stock slid to record lows. Meanwhile, fellow social media stock Twitter (TWTR) could be sending up "buy" signals after the firm told users to change their passwords.

Call buyers blasted this video game stock after a surprise earnings release for Activision Blizzard (ATVI), and it was a rough day for Spotify (SPOT) after the company's first earnings as a publicly traded company. Electric vehicle maker Tesla (TSLA) saw inflated option premiums ahead of its quarterly report, and the stock subsequently dropped after a strange conference call with CEO Elon Musk.

Best and Worst Stocks for May; Disney Earnings in Focus Next Week

Speaking of auto stocks, Ford Motor (F) and Harley-Davidson (HOG) emerged as two of the worst stocks to own in May, while healthcare stocks tend to be the best stocks to buy this month. This skyrocketing biotech stock could also be a bargain for option bulls right now. As alluded to earlier, Disney earnings will be featured next week, along with another dose of inflation data. In addition, Nvidia (NVDA), Etsy (ETSY), Roku (ROKU), and Yelp (YELP) will step up to the earnings plate.


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