Premarket Stocks: What Apple’s Stock Surge Reveals to the Market

What’s happening: Bitcoin erased its losses for the year, while shares of Apple (AAPL) – an indicator for the tech industry – have climbed over the past 10 trading sessions. European stocks, which faced extreme selling as the region rushed to secure energy supplies, are up 11% from their lows.
Equities also continued to rally in the United States. The Dow was up nearly 250 points midday Tuesday and is now down just 3% for the year.

“We have seen a lot of investors [move] past the initial panic now,” Walid Koudmani, chief market analyst at broker XTB, told me. While sentiment may still change, Wall Street sees “much more certainty” about the effects of the war and how policymakers will respond, he added.

Federal Reserve officials are making it clear that they intend to be as aggressive as necessary to contain the highest inflation in four decades. And investors are relieved that Russia and Ukraine are talking to each other, although it’s hard to predict how the negotiations will play out.
The CNN Business Fear & Greed Index, which tracks market sentiment, is now in “neutral” territory. He was producing a “fear” reading a month ago.

The price of bitcoin has rallied in recent weeks, rebounding almost 27% since the invasion of Ukraine in late February. The cryptocurrency is now up over 3% year-to-date, a major reversal in fortunes.

“Market sentiment has turned very bullish over the past week,” Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, told clients on Tuesday.

Then there are stocks. Investors turned to Big Tech companies – which have soared during the pandemic recovery – as they prepare for the Federal Reserve to start withdrawing its unprecedented support for the economy. The shock of war in Ukraine only made matters worse.

The tech-heavy Nasdaq Composite entered a bear market earlier this month when it fell more than 20% from its November high. But it has rebounded over the past two weeks. The index ended Monday up about 14% from its recent low.

Apple, the largest U.S. public company, saw its shares rise about 16% from their March low. They are now down just 1% so far this year.

Even European stocks, which have been battered due to the region’s dependence on Russian energy, are staging a comeback – although Koudmani warned they are likely to remain the most vulnerable.

Overview: Enthusiasm is still fragile. And the US government bond market remains turbulent, with rumors growing that unusual price moves could signal an impending recession (more on that tomorrow). But ahead of the second quarter, there are indications that the gloomy mood is lifting, at least for now.

Tesla stock jumps on stock split plans

Tesla shares jumped on Monday after the electric car maker said it would ask shareholders for permission to split its shares for the second time in two years.

The latest: Tesla shares ended up 8% at nearly $1,092 each. They were up another 2% in premarket trading on Tuesday.

The company did not give details on how many shares investors would receive if it got the green light. Tesla’s previous split in August 2020 gave shareholders five shares for every share they held.

Take a step back: Some of America’s biggest companies have taken a boost after the announcement of recent stock splits, as the move makes their shares more affordable to ordinary investors, boosting demand.

Alphabet, owner of Amazon and Google, has announced that it will split its shares this year.

Tesla’s Journey: You’d be forgiven for having a little deja vu. Corn You’re here (TSLA) had two great years.

“Given the stock’s performance since the last split, this was no surprise,” said Dan Ives, technology analyst at Wedbush Securities.

The shares have more than doubled since then. In December 2020, the company joined the benchmark S&P 500 index, encouraging greater investor buy-in. And in the last quarter, it posted record profits.

On the radar: Tesla wants to increase deliveries by 50% this year despite supply chain challenges. It will be supported by strong demand for electric vehicles, as well as the construction of new factories in Berlin and Austin, Texas.

Can underwear reveal the health of the economy?

Investors are watching the bond market for signs of an impending recession, but that’s not the only metric worth watching.

From underwear sales to cosmetics, more original datasets could also provide clues about where the economy is headed, reports my CNN Business colleague Nicole Goodkind.

Alan Greenspan, former head of the Federal Reserve, is said to be monitoring demand for men’s underwear. It’s generally stable, so when it drops, it’s a sign that consumers are really cutting back on their spending.

Lipstick sales, on the other hand, are expected to jump during tough times as shoppers replace big purchases with small pick-me-ups. (Estee Lauder CEO Fabrizio Freda says tracking skincare sales can be more accurate these days, though the concept is valid.)

Dating sites are also known to get a boost when the economy is in the dumps, as they present a relatively inexpensive way to get an endorphin rush. Nicole points out that Bumble’s recent earnings have exceeded Wall Street expectations.

The big question: is this a bad omen, or just a sign that his business model is working?

following

McCormick (MKC) reports earnings before US markets open. lululemon (LULU), Micron (MIC) and Soft (CHWY) follow after the close.

Also today: US consumer confidence data for March arrives at 10 a.m. ET.

Coming tomorrow: US private sector hiring data will be analyzed ahead of the government’s official jobs report on Friday.

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