Sort of thing that makes you cynical about the integrity of markets.
Had mentioned in an earlier post that China will do whatever it needs to do to prop up its markets and it is doing so with all kinds of interventions since then. But this is expected and the Chinese markets are considered "manipulated" by most.
Had also mentioned that I was worried about Apple's results on the markets. In fact, I am more worried about that than Fed minutes or China since Apple has sufficient footprint to drag markets down. So, I have been monitoring Apple news and Twitter chatter. Apple going down below $100 is a psychological watershed moment for the markets.
Yesterday was a curious day for Apple. After opening down badly like it has been doing lately, it suddenly reversed course after 11AM Eastern and ended the day positive.
Turns out this coincided with a bullish report put out by an analyst at FBR Capital.http://blogs.barrons.com/techtraderdaily/2016/01/04/apple-this-miserable-dark-period-for-investors-will-pass-says-fbr/
who just a week earlier was almost bearish on the stock calling it "white knuckle time" for Apple but has been very bullish for Apple with calls up to $180/share for Apple in 2015.
All this is normal for analysts especially those that corporations seem to keep in their pockets not just Apple.
What is not published in most news is that FBR Capital is also a market maker for Apple and benefits from trading of Apple shares. Presumably, they are also involved in the massive stock buy backs Apple has been doing to prop up its price. This is what makes yesterday's action very interesting and suspicious.
I don't hold Apple stock except via mutual funds like most diversified portfolios and have no reason to talk about Apple one way or the other. I own a lot of Apple devices. In a way, I will be happy for the sake of my portfolio and the overall markets if Apple can hold its share price above $100.
But is there a qualitative difference between China and Apple in the way they do "market puts" to prop up share prices?
SEC does not consider stock buy backs as market manipulation although many consider it so.http://www.bloombergview.com/articles/2015-06-15/senators-think-stock-buybacks-might-be-manipulativehttps://hbr.org/2014/09/profits-without-prosperity
Some even considere it bad for the economy concentrating profitshttp://www.theatlantic.com/politics/archive/2015/02/kill-stock-buyback-to-save-the-american-economy/385259/