- JP Morgan’s Gokul Hariharan, who covers contract manufacturer Hon Hai Precision, writes that the assembler of the iPad appears to be cutting production of the iPad for Q4, citing multiple sources from the electronics supply chain.
- Hariharan writes that the cuts, the first he has heard of ever for the iPad, appear not to be prompted by share loss, as Hon Hai seems destined to try and hold onto 100% of the business, shutting out competitor Pegatron. He notes the cuts are also not tied to any new iPad introduction, as that is unlikely to take place until next year some time.
Some are speculating Foxconn is moving some production to Brazil, hence the cutback in China, but the reason doesn't really matter. Apple is down, and if the stock everyone is hiding in can't rally, the market is going nowhere fast. The NASDAQ has about a 1% negative divergence to the S&P 500 at this moment.
S&P 1120 continues to be a level every human (and his/her computer) is staring at. I would have thought it would have broken by now, but an immense fight to support that level ensues each time we have hit it the past 2 months. Based on how poor the longer term set up is technically for the S&P 500, it seems like this level will finally crack at some point. Remember if you turn this chart upside down, it looks like a basing moment before the next move up - hence, when we look at it the right side up, you can make the easy conclusion on where the next move should be.
What is being somewhat lost in the Europe mess, is the global economy appears to be slowing dramatically. Next week is the doozy for global data (global PMIs, ISMs, unemployment report). I wonder if it will take one of these reports to crack that 1120.
p.s. I find these CNBC terms "Risk On", "Risk Off" to be incredibly annoying - I am using them almost daily now, in very tongue in cheek fashion. It's irritating to see the entire market move in lockstep.