Selloff Hardly a Disaster, but Apple Is a Volume Monster


: Is this a disaster, or an opportunity? The jury is still out. Stocks have rallied off their midday lows as the dollar dropped near noon ET.

While overall volume has been poor this year, Apple is sucking up what little volume there is. You’ve heard the complaint that Apple is taking up a bigger and bigger share of the market capitalization of the major tech indexes. Less noted is the volume analogue: As Apple’s price has moved up some 50 percent in the past few months, the volume has also moved up, almost as much.

Apple’s six-month trailing volume average is 17.5 million shares, but since February it has been over 20 million shares most days and the 10-day average volume is now up to 22.4 million shares.


1) The bifurcation in homebuilders and materials I talked about today is happening. Move-up homebuilders like Lennar are not down as much as lower-priced builders like KB Home.

The do-it-yourself remodeler still strong: Sherwin-Williams is UP this morning as it dramatically raised its first-quarter earnings estimates (from $0.56 to $0.74 to $0.92 to $0.95) partly on a 20 percent increase in paint store sales. Companies more exposed to homebuilders like USG and Masco are down three percent to four percent.

2) Small-cap Russell 2000 index underperforms other major indices, as Goldman Sachs ends its March 15 bullish call on the index. The recommendation was predicated on: “(i) still friendly, if not accelerating, U.S. macro data; (ii) supportive monetary policy; and (iii) better insulation that Russell offers against global concerns...”

Goldman now admits that, with the jobs report disappointing and the Federal Reserve looking like they are further from a third round of quantitative easing than they had expected, “two out of three pillars supporting the recommendation were compromised.”

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