Apple, Unemployment, S&P 500 And Market Levels Update- New Random Comments Section

[ 0 ] January 9, 2011 |

We are starting a new section on The Wall And Broad Report called “Random Comments”. This will be brief thoughts that we hope to be meaningful to investors and traders but not so long for the need to take up an entire post on the site. You can also follow these Random Comments and other posts in real time on Twitter following us under the name WALLANDBROADRPT, and coming soon is our Fan Page on Facebook. The new site programmer should have all active this week, and in the meantime here are a few “Random Thoughts” for this evening to bring us to the trading week tomorrow.


Earnings for AAPL in the current September year should be in the area of $20.00 per share. Cash should approximate $70.00 a share unless there is a major acquisition or shareholder distribution. Further substantial growth is likely in the year that begins October 1st. Less the cash, the stock is only selling at only 13x earnings, an extremely low valuation given AAPL’s strong competitive position. Despite the probable Verizon iPhone announcement reportedly scheduled for Tuesday and the probable price gap, we do not recommend selling any gap and losing a quality position. Technically, the stock just broke out going through $320-$325. We remain very bullish on AAPL and its shares are an extremely attractive vehicle for growth accounts. A target above $400 per share seems to be a reasonable objective over the foreseeable future.


The only reason that the unemployment rate fell to 9.4% on Friday was the fact that 260,000 people stopped looking for jobs, not the disappointing number of new jobs created of 103,000. The decline was hailed as good news. At least 200,000 jobs per month are needed for a sustained recovery in the labor market. Since the recession began, some 7 million jobs have been lost with Obama economics doing little to significantly reverse the trend. The U- 6 unemployment rate was 16.7% as the underemployed increased to 26.1 million.


Goldman updated their target on the S&P 500 to 1500 for the year 2011 from1450. They raised the earnings estimates on the S&P 500 to $96.00 for 2011 and $106.00 for 2012. This is a new update last week from their target of 1450 on the index that they made a few weeks ago. Additionally, CITI raised their target again last week on the S&P to 1400 from 1300. They are now coming closer to Lange Financial Services (LFS), who after seeing the profits component of the 3rd Quarter of the GDP, raised their target to 1550 a few days before Goldman initially published their first target at 1450.. LFS is using earnings of $100 for 2011 and $110 in 2012 for S&P 500. In fact, LFS was ahead of Goldman, Deutche Bank, Bank of America, and CITI on the published S&P and earnings forecasts.


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Category: Economics, General, Markets and Trading, Politics, Technology