All of Wall Street is eyeing Apple today, and the company remains a major barometer of how investors feel about the market as a whole.
The iPhone maker and global tech giant, the first U.S. company to top $1 trillion in valuation, is set to report its quarterly earnings after the closing bell today, and the broader market is trading in lockstep with Apple through morning trading.
Apple stock is down 33 percent since reaching its record high of $233.47 in October, and Tuesday’s announcement is one of the most highly anticipated quarterly reports in years for investors.
Today’s report comes just four weeks after Apple warned its quarterly revenue would be about 7 percent below previous projections, primarily due to weaker sales in China amid the ongoing tariffs battle between Washington and Beijing.
Apple is currently less expensive than the broader market, trading at 13 times forward earnings compared to the S&P 500’s valuation of more than 15 times.
Per CNBC:
The SPDR S&P 500 ETF Trust (SPY) hit its high of the day at the same time shares of Apple hit their session high. Once Apple pared its gains to trade flat, the SPY — which track the S&P 500 index — reverted back to breakeven. As of 10:54 a.m. ET, both Apple and the SPY were both down 0.2 percent.
Apple shares have been beaten down lately, falling about 1 percent this month, on the back of a big cut in revenue guidance. Earlier this month, the tech giant slashed its fiscal first quarter revenue forecast amid weakness in the Chinese economy and weaker iPhone sales.
Most of the bad news may have already been priced in, however. Larry Benedict, founder of The Opportunistic Trader, said the options market is pricing in no more than 3-to-4 percent move on the earnings report, “so we’re not expecting much there.”
Apple shares fell nearly 10 percent after cutting its guidance earlier this month. Apple has a 3.2 percent weighting in the SPY, second behind Microsoft’s 3.7 percent weighting.