Apple (AAPL) Reports Monster Quarter on Blockbuster iPhone 4S Sales

The S&P’s five-day win streak came to a halt Tuesday, but can be considered a moral victory as stocks pared losses during the session. The market headed lower overnight amid anxiety over the Greek debt talks, which hit another snag. Some foreign markets were down 1%, but the weakness did not travel overseas after the bell.

European finance ministers rejected the proposed terms of a deal with Greece’s private creditors, increasing anxiety that the country is headed for an inevitable default on March 20. However, with several major events on tap in the US over the next two days, it is no surprise that the market traded higher to fill most of the overnight gap.

In a matter of minutes, Apple (AAPL) will report earnings for Q4 2011, which most expect to be blockbuster. iPhone sales, which were weak in the 3rd quarter as consumers waited for the new phone, are expected to drive a strong quarter. The stock traded back up to historic highs last week, with anecdotal evidence pointing to a positive report from Apple, which last quarter fell short of estimates for the first time in three years.

UPDATE: Apple (AAPL) reports a MONSTER quarter, highlighted by $37 million iPhone sales, well above consensus estimates. Apple preliminary EPS is $13.87 vs $10.08 Capital IQ Consensus Estimate, while revenues were$46.33 billion vs $39.04 billion estimates. By all accounts this was a blowout report that should see the stock open sharply higher when it’s unhalted at 4:48 ET.

Also tonight is the State of the Union address by President Obama, where he is expected to lay out an agenda focused on producing jobs. Traders often do not like to be short in front of this type of event, which can often strike a pro-business and market positive tone.

Also, tomorrow we will get an announcement from the FOMC after its latest two-day meeting. Traders hardly ever position short ahead of such an event due to the possibility of QE3 or other monetary policy measures. After an improvement in US data, the committee is expected to sit on its hands, but making a bet on the market’s reaction is not worth the risk to most market paricipants.

Tomorrow will be very interesting, because it could bring “sell the news” type of scenarios based on the aforementioned three events. If we get a gap up tomorrow, it could be a prudent time for investors and swing traders to take some profits based on the action so far in 2012.

Yahoo! (YHOO), overshadowed by AAPL’s announcement, also reported after the close, posting a narrow beat on EPS and trading slightly higher. AMD Athlon (AMD) is down 2.5% after hours following its report today, while Fusion IO is down more than 13% after posting its quarterly results.

About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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