Look out, run, PANIC!!!
Apple's stock has dropped 4%, all the way down to $497 pre-market as Reuters is reporting that the Nikkei is reporting that AAPL has slashed orders for new IPhone displays by 50% as well as other components. Of course, AAPL never comments on rumors and today is a holiday in Japan so no comments from the suppliers either but the MSM is running with the rumor and the thinly-traded AAPL futures are taking a pounding, and dragging the Nasdaq futures down with them and that's dragging down our other indices and giving us a generally crappy open.
The chart on the right is from MacStories, with a nice write-up on the 2013 outlook, while the chart on the left was in Fortune this week and indicates actual sales (or actual projected sales) for Q4 of about 50M phones and, if you take the Nikkie article at face value, Q1 sales will drop off as fast as Q4 took off – despite the fact that the IPhone 5 only rolled out in late November.
Also a very important point made by Forbes is that Q1 2012 was a rare 14 weeks and Q1 2013 has only 13 so AAPL has a 7% handicap out of the gate. We will, of course, be BUYBUYBUYing more AAPL at $500 as there is no news here and perhaps there is a kernal of truth in the rumor (there is in all the good ones) but likely it's related to AAPL selecting another supplier or shifting their focus to the also-rumored new IPhones that also haven't been confirmed yet or perhaps even this is just a misinterpretation of AAPL's normal business cycle, in which Q4 is their big sales quarter and Q1 and Q2 are simply lighter.
What we can do right now (8:15) is to go long on the Nasdaq Futures (/NQ) off that 2,725 line – as that's where AAPL is bouncing at $500 and makes an easy signal to get out if it doesn't hold. AAPL's 4% drop is a 0.8% drag on the Nasdaq and there's no other reason for the index to be dropping as the other news this weekend has been fairly benign.