Courtesy of Benzinga
The “Frozen” character Elsa famously declared it’s time to “let it go” when her dark secret has been discovered. Boris Schlossberg of BK Asset Management has a similar message to Apple Inc. (NASDAQ: AAPL) investors.
‘Absolutely’ No Discretionary Spending
The market is guilty of “utterly underestimating” the ultimate economic impact the coronavirus will have on the U.S. economy, Schlossberg said during a recent CNBC “Trading Nation” segment. The average U.S. consumer is likely to only spend their money on non-discretionary goods. Unfortunately, the average consumer will “absolutely” avoid anything discretionary for at least a year.
“So within that basket, I think you have to let Apple go,” he said.
Pent Up Demand
Right now is a “very difficult time” for the American people but once the virus is resolved, people “are going to want to get out,” Piper Sandler Chief Market Technician Craig Johnson said on “Trading Nation.” The American public are going to want to go on cruises or fly, especially as the travel industry looks to cut prices to spur traffic.
The same can be said for the iPhone, especially the upcoming 5G model. Consumers showed a willingness to spend on the iPhone throughout the 2007 and 2008 economic crisis and now should be no different.
“I think you’re going to see a bigger rebound here in 2020 than I think a lot of people think,” he said.