Apple (AAPL), the largest company in the world by market capitalisation at $860BN, reports earnings after the close today. iPhone sales are slowing and the company is set up to potentially disappoint the market. Apple suppliers have already hinted at bad news and a sharp slowdown in global unit sales. The bar is set at 52-53 million iPhone sales for the latest quarter and revenues of $61BN. A glance at the chart of AAPL doesn't inspire confidence. The rally over the last 12 months has taken place on weakening relative strength and slowing momentum. AAPL currently sits just above its long-term moving average at $162.
On a positive note, AAPL has a mountain of cash on its balance sheet; $163BN at last count. CEO Tim Cook could decide to make a capital distribution to shareholders, either by dividend payout or share repurchase, which could support the stock in the event of an earnings disappointment. With AAPL reporting this evening and the Federal Reserve FOMC meeting tomorrow, it's shaping up to be a big week for markets. Stay tuned.
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