Stock Market Hits Record High — Fueled by Apple and Tax Reform Expectations
Rush Limbaugh.com ^ | August 2, 2017 | Rush Limbaugh
Posted on 8/2/2017, 2:24:50 PM by Kaslin
RUSH: The Dow Jones Industrial Average right now 21,992. It was at one point today 22,000, all-time record. And of course that number brought forth all of the negativists who are now claiming, including Greenspan, “It’s gotta burst. It can’t go on. It’s a bubble and it’s gonna blow up and we’re all gonna die. And we’re all gonna be poor, and we’re all gonna lose everything. It’s horrible.”
Now, two things about this: 22,000 stock market. Who is that? Who’s getting rich? Answer, hint, clue: It ain’t the people that voted for Trump. Trump’s out there taking credit for it. He did today in the legal immigration meeting. He was singing its praises. He was talking about what it means for American business and our companies and our industries and jobs and so forth.
Why is the stock market at 22,000? Now, Apple reported great numbers yesterday, and that is a factor. And I know a lot of you don’t want to hear me talk about Apple ’cause you think I’m biased and conflicted. But Apple’s third quarter numbers yesterday were astounding. But it’s not their third quarter numbers that has Wall Street all in a tizzy. It’s the guidance they offered for their fourth quarter, which is calendar third quarter. Apple is like the United States; their fiscal year begins October 1st, so their fourth quarter is the September quarter.
And their projection, their guidance — companies are required to do this. They are required to tell analysts and the world what they think their best estimate, not a guess, not allowed to guess, their best estimate of total revenue for the next three months will be. And there are penalties if they are way off either way. So they have to study it and they have to get as close as they can. There is leeway.
Many companies, when reporting their guidance for the next quarter, try to underreport it so that they can always show themselves beating the guidance, which is a psychological positive. The reason is the guidance for Apple was so intriguing to people is because the new iPhone is going to be the first iPhone with a redesign in three years.
And for those of you who don’t keep up with all this, the rumors on the new iPhone have been just all over the place, but the leading, dominant rumor is that it’s delayed, that it won’t be on time. And that even if it is on time, it’s going to be in such limited quantities that nobody’s gonna be able to get it! And if you’re an Apple investor, that’s not good news, because if you can’t get it, you can’t buy it. And if you can’t buy it, Apple doesn’t get the revenue and then their quarter doesn’t turn in as well, as good as the investors want.
Apple’s guidance yesterday is being widely analyzed to mean that the phone will be on time. And that’s why Wall Street has gone nuts. Apple has recorded an all-time high in after-market trading yesterday and opening market trading on NASDAQ today. They projected revenue between 49 and $52 billion, and that is much higher than the same quarter they projected a year ago. That’s the comparison, year over year.
And the phones were on time last year, but, as I say, they were an iterative update design-wise. I mean, the guts of every iPhone is a massive improvement. Every iPhone every year is a quantum leap over the prior year. But in terms of mass consumption people look at the design and if they don’t see that it looks any different then it may not be any different and they may not be as interested in it.
So this iPhone 8 probably — it won’t be called that. I’m predicting it’s gonna be called the iPhone X for 10 or the iPhone Pro. And I think it’s gonna be purposely limited quantity. And if you care why, I’ll get into it later. But you know what this phone is? The iPhone — let’s call it 8 since I think that will help most people understand. The iPhone 8 is actually an iPhone way ahead of its time. There are technologies in this phone that Apple, if it weren’t their anniversary year, would not be bringing out.
Apple has a problem when they manufacture iPhones. Every part in the phone they have to be able to get hold of 200 million of them, 200 million chips, 200 million displays, 200 million hard drives or NAND flash storage, 200 million of everything. That limits the technology that can go into the phone. The newer the technology, the tougher it is to mass produce at affordable prices. The newer the technology the less of it there is because it’s in its early phases.
But because this is in an anniversary year, I think Apple is doing something they’ve never done. I think they’re building a phone that has technology in it that they probably wouldn’t do this year if it weren’t — for example, best guess — and it’s still a guess, but it’s educated. In this phone, the fingerprint ID is gone and instead facial recognition is going to be how you secure the phone and do Apple Pay.
3D infrared facial recognition. Remember, facial recognition has to work at different angles with the phone laying on the table. It has to work at night. It has to work in the dark. It has to work in every possible lighting scenario you can imagine.
So it’s gonna be IR. This technology cannot be mass-produced. I don’t think they can make 200 million, at least in the first six months. I think this phone is gonna be priced through the roof. This phone might — at its peak, at its maxed-out configuration — cost as much as $1400 to limit demand because they can’t make 200 million of them. So they’re gonna have the 7s and the 7s Plus and then this new one which everybody is gonna want. It is gonna be in constant shortage. They’re never gonna be in balance on supply-demand with it, and Wall Street’s gonna love that.
It’s just like their AirPods. It came out last October and it still takes six weeks to get them when you order them. Last year, the iPhone 7 Plus, the big one, was announced on launch day. But you couldn’t get it if you missed… They only had two or three million of them on launch day. If you didn’t get one of those, it wasn’t until November. It’s gonna be the same thing with this iPhone 8 or X or Pro or what have you, but it’s gonna be something. It’s gonna be smaller. It’s gonna be the same size as the iPhone 7, but it’s going to have a screen that’s about as large as the 7 Plus.
So people hate the big phone but buy it for the big screen. They’re gonna be able to have two in one. I’m not particularly crazy about a phone that small, but I’m not the mass market. It’s gonna be big. There’s brand-new battery technology in it. It may have battery life that’s equitable or similar to the 7 Plus, which is… The tech in this phone, just trust me — and Wall Street is all over this. The reason for this, folks, is that Wall Street… It’s not just Apple. Wall Street’s going crazy here, 22,000.
But it’s interesting that the people getting rich off of the Dow Jones Industrial Average, the stock market, are not Trump voters, are they? I mean, some of them are in there. But it might be accurate to say that the people who are benefiting from this massive run-up in the stock market are actually people that did not vote for Trump and do not support Trump. It doesn’t mean anything. It’s just a little dichotomy. It’s an interesting thing to me. I don’t think it’s gonna matter. It’s just an interesting observation.
But Trump’s out there touting it, and there are many reasons why the stock market is up. There’s another reason besides all this Apple stuff. The other reason is they are expecting massive tax reform. This massive expansion of the stock market (we’ll call it the Dow Jones Industrial Average), do not doubt me: Much of it — not all of it, of course. Much of it is rooted in the belief that there will be significant corporate and capital gains tax reform, and they have believed this ever since Trump was elected.
It was a major part of his agenda during the campaign, and he has continued to discuss it, and it remains a focal point in the Trump agenda. But it doesn’t look… Newt Gingrich has another tweet out today (summarized): “If you don’t get this done, say ‘hi’ to Speaker Nancy Pelosi,” if you guys don’t get tax reform done. Well, there’s a problem here: The Republicans on Capitol Hill don’t want to help Trump get anything done. I have been trying to tell people this for the last six months. Well, let’s be conservative and say the last four months.
It has been abundantly clear to me that the Republicans are not interested in Trump succeeding. Certainly the Democrats aren’t. That’s not even arguable. Now, the Republicans not interested in Trump succeeding? There are many reasons. One of the reasons is that they are members of the establishment. The establishment doesn’t want the outsider succeeding. Been through that drill; you know it. There’s another possibility. Trump’s approval number has fallen to 38% at Rasmussen. Rasmussen is the, quote-unquote, “friendliest” poll that Trump has had.
When all the Drive-By polls had Trump at 42, they had him at 48. When the Drive-By polls plunged to 40, Rasmussen had him at 45. Now, Rasmussen has him at 38. This is lower than at any time in the Obama administration. What this means is that Republicans on Capitol Hill are looking at their president saying, “This guy is not popular. There’s no way I’m gonna line up with him! He’s not popular.” So it’s a double whammy with Trump attempting to get support and help from the Republicans in the Senate.
Now, Paul Ryan (interesting) got on a horse and drove around the Mexican border and all of a sudden has become a big proponent of a wall now. Did you see that? (interruption) Oh, yeah! Cowboy Paul Ryan, a big advocate for the wall now. There’s a picture of him on the horse. Well, he not on the horse; he’s standing by the horse. Presumably, he just got off the horse. Maybe was getting on the horse. But he’s become a big advocate for the wall.
But the Senate Republicans are just not interested in helping Trump, and I think it’s a combination of the fact it’s establishment versus outsider, and the fact that he’s unpopular in their eyes. Not with his base, but with everybody else. And what sense does it make to latch on to some unpopular president’s agenda? It gives ’em a natural out on things like what he wants to do for health care, tax reform, and other things.
RUSH: This is Trump. After the details of the immigration plan were announced by Cotton and Sonny Perdue, Trump talked up the stock market and the economy.
THE PRESIDENT: The stock market hit an all-time record high today, over 22,000. We’ve picked up substantially now more than $4 trillion in net worth in terms of our country, our stocks, our companies. We have a growth rate, a GDP which has been much higher than, as you know, anybody anticipated, except maybe us. But it’s gonna go up. It’s gonna go higher too. Foxconn is going to spend $10 billion in Wisconsin and other places. And I think the $10 billion is gonna end up being $30 billion. They make the iPhones for Apple and others and it is a truly incredible company. So we have a lot of things happening that are really great.
RUSH: Now, Foxconn, they are negotiating to build a factory in a pretty wide area of southeastern Wisconsin. They’re not gonna make iPhones there. Those will remain manufactured in China. What the Foxconn plant will produce in Wisconsin is LCD screens, which, if you have an iPhone now that’s what’s in your screen. But they’re not gonna be making any for the iPhone.
What they’ll make is LCD screen for TV sets, for the dashboard screens of automobiles and other assorted and sundry devices that use LCD. The trend in iPhone displays now — well, mobile phone displays, is for OLED, which is a different kind of display, light emitting diodes. It’s much tougher to make. The yield rate on them is very low, so they’re expensive. And that’s another reason why the iPhone 8 probably will be limited in quantity.
Samsung’s the only manufacturer of those things, and they haven’t reached mass production level on ’em like they have LCDs. But still the Foxconn deal is a big, big deal, and I don’t think it’d be happening if Trump hadn’t made a push during the transition, the early days of his administration for things like this. There’s no question that this is not something Obama would have pursued. And I don’t think too many other people would have, because they would have not thought it possible.
Why would a Taiwanese company with most of its business in mainland China and Hong Kong open a plant in the United States? But for the reasons that Trump has elucidated in the past and just the energy he’s put into it, it looks like it’s gonna happen. There are still some things that have to be overcome, like they’re asking for huge tax breaks in Wisconsin, Foxconn is. And there’s gonna be opposition to those because they’re pretty significant, the tax breaks that are being requested.
It will create beaucoup jobs, but people are gonna say, “What is it gonna cost to create those jobs in terms of the tax base?” I think it’s all gonna end up working out. I think Foxconn is gonna end up locating in southeastern Wisconsin, but it’s gonna be a battle. But, again, bottom line, I don’t think it would have even been up on the radar if Trump had not spearheaded such thinking and such an effort……………………..
Stock Market Hits Record High — Fueled by Apple and Tax Reform Expectations
Rush Limbaugh.com ^ | August 2, 2017 | Rush Limbaugh