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Market Lab Report - Premarket Pulse 8/4/18

So Apple becomes the first trillion dollar company. Interestingly, the revenues it earned in the last three quarters exceed all revenues Amazon has earned in its entire lifetime. Apple generated a $48.35 billion profit during its fiscal 2017 and made $13.8 billion in net income during the March 2018 quarter, while Amazon's total net income since inception is about $9.6 billion. Of course, many of you may remember how Amazon was the market's loss leader during the dot.com boom, defying short sellers, as Amazon continued to rocket to new highs.

Nevertheless, over the last few years, many have argued including myself that Apple's days are numbered due to its closed source nature, motivating the question, where is Apple's next 'killer app'? Furthermore, many suggested the usefulness of Android phones with their open source architecture would easily surpass Apple. Yet Apple continues to shine, the reason being that the spirit of Steve Jobs lives on within Apple's corporate culture. Apple continues to focus entirely on customer satisfaction, always asking themselves, what does the customer want? Personalized user experience is key. And Apple has cleverly used Android's open source architecture as a way to identify the best quality apps for its own products. While it's true that Android's open source results in many more available apps, Apple sifts through the wide universe of Android apps and finds the best. Customer reviews are one such way in which one can find the best apps for specific functions. Want some of the best iPhone photo or video editing apps? Go to the app store and quickly find what you need. Still, Apple remains strict in terms of which apps it allows into its universe, thus quality control has always been an essential ingredient. 

That said, while the sales statistic of Apple vs. Amazon is impressive, Amazon's Jeff Bezos has always followed what he preaches. Customers always want quality products for the lowest price delivered in the shortest amount of time. Thus Amazon is nipping at Apple's heels in terms of market value which stands at nearly $900 million. Amazon closed at $1823.29 on Friday so only needs to rise 12%, or to a price of $2051 to reach $1 trillion. For comparison's sake, Alphabet (GOOGL) only needs to rise 16% to reach $1 trillion.

But despite the fanfare of Apple hitting $1 trillion, the trade war remains at issue. The Trump administration said it was considering doubling proposed tariffs on the $200 billion in Chinese goods, prompting Beijing to fully retaliate if they’re implemented. So the market remains on a wait-and-see attitude while global QE continues to push US markets and the new alt-currency FAANG stocks higher, albeit in sloppy fashion as has been the nature of many stocks and US market indices in 2018. 



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