The Biggest Threat to Apple Inc. (AAPL)’s Share Price: Google Inc (GOOG)

Page 1 of 2

While Apple Inc. (NASDAQ:AAPL) has faced its share of headwinds over the past few months, having slid 40% from its historic high above $700 per share last September, the company seems to still be facing some real challenges. There is a real concern among investors and industry-watchers that the company’s innovation rate has slowed significantly. Where Apple Inc. (NASDAQ:AAPL) was once known not only as a technology leader but for its ability to remain focused on great projects, the company has become more reactionary, trying to compete with increasingly well-executed competition. Despite all of these issues, however, the single largest threat to Apple Inc. (NASDAQ:AAPL)’s share price is the health of the overall market.

Apple Inc. (NASDAQ:AAPL)

Historic levels for the Dow
Tuesday’s trading session has seen the Dow Jones Industrial Average break through all-time intraday highs, trading at levels not seen since 2007 and on pace to close above the record close set Oct. 9, 2007. Much of the run has been triggered by general optimism about the prospects for the economy looking ahead. The rise puts the index up over 8% so far this year and is marked by money moving into stocks. Reuters quotes Russell Investments’ Chief Strategist Stephen Wood, who admits the move is not totally supported by fundamentals: “There is a lot of momentum and rotation going into equities from cash and bonds, and right now sentiment seems to have the upper hand over fundamentals.”

While some disagree, many commentators attribute the rise to action of the Federal Reserve and Chairman Ben Bernanke. Recently, whenever the market has even paused for a breather, the Fed has aggressively pushed to keep the rally alive. Those who take a softer view see Bernanke’s actions as providing liquidity only, and not being a driving factor in the rise. In either case, the Fed has played a significant role in the process, suggesting that any major policy shift has the potential to be a blow to the overall market.

The skeptics point out that these types of peaks often precipitate significant declines; the October 2007 peak came before stock indexes were essentially cut in half. While market internals are solid, the psychological impact of these various factors should not be ignored. Even if the rally has some room to run, the dance between the Fed and the market should be watched.

The Google effect
Over the past several months, as Apple Inc. (NASDAQ:AAPL) has languished, Google Inc (NASDAQ:GOOG) has surged to its highest level of all-time. Apple has stagnated to some extent, reporting its lowest growth statistics in recent memory, while Google continues to find growth and innovation. Though the connection itself may be coincidental, Apple Inc. (NASDAQ:AAPL)’s troubles are certainly not hurting Google Inc (NASDAQ:GOOG)’s ability to fight higher.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!