Apple's reversal of fortune continues, and a historic stock offering may be in the works

CNBC

2 days ago

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks on Friday are finishing the week out strong. The technology sector and in particular Apple are big reasons why — more on Apple shortly — but there's decent strength across the board with most of the 11 sector indexes in positive territory except for the industrials, real estate, and utilities. Rally mode: Apple's reversal of fortunes continued Friday as shares climbed more than 4% — bringing its week-to-date advance to roughly 13%, on pace for its third-best weekly performance in the past decade, according to FactSet data. The only other better weeks in that time frame came in late July 2020, fueled in part by a blowout earnings report amid a pandemic-fueled surge in electronics purchases, and in early May 2018, which also coincided with strong quarterly results and guidance . With this week's surge, Apple shares have crossed over their 200-day moving average, a positive technical milestone, and are trading at their highest levels since "Liberation Day" on April 2. The driver of this week's resurgence, of course, is Apple returning to the good graces of President Donald Trump with its $100 billion additional investment commitment to U.S. manufacturing. Trump's tariff policies — and, more specifically, his public-pressure campaign on Apple to build iPhones in the U.S. — have been a major overhang on Apple shares this year. Couple that with dual threats to its lucrative services business and its apparent aimlessness on artificial intelligence, and that's how you get Apple shares entering this week down 19% year to date, which put the stock in the bottom 15% of all companies in the S & P 500 during that stretch. The market reaction over the past three days is clearly signaling that investors are feeling better about the tariff threat and, at least for now , are willing to put aside their other concerns. We're certainly feeling better about the stock now, too, after last week's strong earnings report. During Trump's first term, CEO Tim Cook earned plaudits for his ability to maintain a good relationship with the president and minimize Apple's exposure to that batch of tariffs. Up until a few days ago, it didn't seem to be working this time around. But once again, Cook showed why betting against him has been a losing proposition for investors. Big deal: The thawing IPO market may get one of its biggest — and unique — deals of all time later this year. On Friday, The Wall Street Journal reported that the Trump administration is planning to sell stock in government-controlled mortgage giants Fannie Mae and Freddie Mac. According to the report, at least some people in the administration are discussing values for the companies in the ballpark of $500 billion or more — in that range, it could be a historically large stock offering depending on how many shares are sold. The biggest initial public offering in U.S. stock market history is Alibaba in 2014, which saw the Chinese e-commerce and cloud giant raise nearly $22 billion, according to Renaissance Capital data . The only deal larger was Saudi Aramco's 2019 listing on the Tadawul in Riyadh. There's a Club-stock connection to the chatter: Goldman Sachs CEO David Solomon and Wells Fargo chief Charlie Scharf have gone to Washington to discuss the administration's plans for Freddie and Fannie with Trump, according to the report. So, too, have the leaders of Morgan Stanley , JPMorgan Chase , Citigroup and Bank of America , the report said. This is a complicated deal given the nature of Fannie and Freddie, which the government has controlled since 2008, and plenty of details could change from here. Still, a deal of this magnitude and structure is certainly one to watch. Goldman and Wells Fargo have been beneficiaries of the recent uptick in dealmaking and IPOs, in particular. In early June, we discussed the heating up of the IPO market, and it's only gotten hotter since then. There were 26 IPOs in July, and already there have been seven in in the early days of August, according to Renaissance Capital . For the year, we've seen 130 IPOs already versus just 150 in all of 2024, Renaissance's data shows. Next week: It's a lighter week of earnings with only five companies in the S & P 500, and one company in the portfolio scheduled to report: Cisco after the closing bell on Wednesday. Some other notable earnings releases to look out for are CoreWeave , Cava , Brinker , Deere , Tapestry , and Applied Materials . It will be heavy on the data side with the July consumer price index and producer price index due out, along with the government's retail sales report. In other events, on Thursday at noon ET, we'll have our August Monthly Meeting. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.