Megacap Slump Is Testing Apple’s Safe-Haven Status

Sep 29, 2023 thejournalbiz

The stock historically outperforms in market corrections

Apple’s quality attributes clash with concerns over growth

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Megacap Slump Is Testing Apple’s Safe-Haven Status
The stock historically outperforms in market corrections, via Bloomberg#apple #stocks pic.twitter.com/m4vaYWQ62e

— The_Journalbiz (@the_journalbiz) September 29, 2023

Bloomberg chart

The Fed-induced selloff in technology stocks has traders dusting off their turmoil playbooks. Trouble is, one of the most popular strategies isn’t working: hiding out in Apple Inc.

Recent weeks have seen the stock fail to live up to its reputation as a haven. Concerns over China and recent growth trends — coupled with central bank policy that has contributed to the tech sector falling into a correction — has erased nearly $240 billion in value this month alone.

Since the end of July, Apple is down 12%, compared with the Nasdaq 100 Index’s 5.8% decline.

But while Apple isn’t immune from the economic backdrop and faces headwinds of its own, its slide hasn’t changed characteristics that have traditionally drawn investors — including Warren Buffett — to it in times of uncertainty, including a rock-solid balance sheet and durable revenue streams.

The stock is seen winning favor if a bleaker economic outlook leads investors to sour on more speculative plays.