Tuesday’s a Big Day for Tech


Today’s a busy day for the technology sector, with key events from Apple (AAPL) and Facebook (FB) vying for attention.

AAPL hits the stage first, at 10 a.m. ET. That’s when CEO Tim Cook is expected to present new iPads and Macs in Brooklyn. Followers of the company predict its new iPads to have smaller bezels (non-display surface area around the screen).

The home button will also reportedly go away in the tablet’s first major redesign since 2015.

Its MacBook Air computers, which haven’t changed in three years, are expected to get a better screen. In addition, there could be Mac Mini for professionals with no monitor but more powerful processors and solid-state memory.

Investors will probably view the products as icing on the cake for a company that’s proven to be one of Big Tech’s most respected growth stories in recent quarters. The last earnings report showed better-than-expected gains in its service businesses like Apple Pay and digital content. Cook’s also refused to “take the low road” on pricing to get iPhones out the door.

Analysts say both of those approaches — stickier service revenues and higher pricing — will support margins and stock valuations over the longer term. We’ll find more when AAPL issues its numbers after the closing bell on Thursday.

Chart comparing Apple (AAPL) and Facebook (FB) since June 30, 2018.

FB, on the other hand, has been almost the polar opposite. While AAPL has enjoyed stronger margins, Mark Zuckerberg’s social media giant has seen legal costs devour profitability. While AAPL has increased customer engagement, FB’s seen traffic and usage shrink. While AAPL has successfully grown news businesses, FB hasn’t demonstrated it can monetize initiatives like Stories and Messenger.

Amazon.com (AMZN) could be another elephant in the living room because now the giant online retailer is trying to elbow its way into the advertising market. Of course, some of these negatives are already priced because FB’s already lost one-third of its value since July.

Other events after the closing bell include earnings from Electronic Arts (EA), eBay (EBAY) and Baidu (BIDU), which are all facing a rough tide of bearish sentiment. Analysts have cited weak channel checks on video-game maker EA and departures of executives on the “Battlefield V” and “Anthem” titles.

EBAY, which also missed estimates in July, took another hit last week after numbers from PayPal (PYPL) suggested weak volumes at the online auction company. Chinese Internet firm has BIDU’s fared better in terms of its own numbers, but has been overshadowed by negativity toward the giant Asian economy.

In conclusion, today’s a busy day for tech. Hopefully this post will help prepare you for some of the big events.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.