Easy money seems to being made with end of quarter rebalancing, moving Tesla and Apple up off lows
Tesla $Tesla(TSLA.US$ shares and Apple $Apple(AAPL.US$ shares are moved up off their lows with Tesla moving up off 10-month lows and Apple moving up off five-month lows.
One of the reasons for this is ‘end of quarter rebalancing. Simply put, its because investment managers are taking advantage of their ‘cheaper’ prices, given so far this year Tesla shares have fallen 27% and Apple dropped 10%.
Toward the end of a quarter, investment managers (fund managers) usually take profits from stocks that have done well, like Nvidia for example, and then move some cash into unloved ‘quality’ stocks, that have not done well, such as Tesla and Apple. Why?
Well, investment managers typically need to bring their investment portfolios back into alignment, as part of their set-out mandate in managing other peoples money. That’s to put it simply. Just keep in mind investment managers and exchange-traded fund providers typically do this every quarter, to bring their investment portfolios back into alignment. But it's not just about buying a ‘cheap stock'. Investment managers are thinking about future long-term growth and why stocks like Tesla and Apple shares could be higher in a year.
So why is that?
Well Tesla $Tesla(TSLA.US$ is working on driving sales, with the roll out of $25,000 electric vehicle (by using a cheaper batteries in collaboration with CATL).
While Apple $Apple(AAPL.US$ in talks with Google to use its Gemini artificial intelligence engine, to power into the iPhones. If this goes ahead, new iPhones will have the software this year. This will save Apple billions of dollars per year given Apple has been paying Alphabet yearly to make its search the default in Safari on iPhones.
And lastly, consider that these two tech giants, Apple and Tesla won't likely stay at these depressed levels over the long term.
And floods of floods of new investors could be entering the stock market this year, with the Federal Reserve expected to cut interest rates. This benefits company profits but boosts individual spending power. It's a win-win for consumer spending stocks.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Cloud D Investor : isn't google paying Apple 7 billion per year to make Google search the default search in safari?
TOLKKI : Hurry up and bounce back!
Slug :
Cocona33 : The bottoms are going to be gone.