zerohedge.com / by Tyler Durden / Sep 19, 2016 10:03 AM
The main reason why last week’s market rout was not even worse, is because AAPL, the world’s biggest company by market cap and a core pillar of both the S&P and Nasdaq, staged one of the biggest weekly rallies in years following reports of better than expected adoption and pre-order reports from carriers. However, at least according to JPMorgan, it was all a lot of noise and very little signal.
As JPM’s Rod Hall writes in a note release overnight, the positive market reaction is “premature.” He adds that JPM “updates on Apple this morning post the positive US carrier commentary of last week and in conjunction with a subscriber base update from our US Telecom team headed by Phil Cusick here (LINK). Our current US iPhone Y/Y growth estimate of 4% for the Dec QTR within our below consensus iPhone sell-through expectation of 69.4m units looks, if anything, optimistic against our Telco team’s bottom up modeling. We note that Apple typically runs shortages at this point in a launch and that this is likely exacerbated by lower initial builds than we saw last year. We are sticking with our cautious late 2016 stance on Apple based on our below Street iPhone expectations though we continue to believe the stock is undervalued with better options for growth in 2017.”
Here are the other reasons why JPM remains bearish:
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