No pull whatsoever. That's how I feel about the Apple (AAPL) quarter. It was almost as if the situation got zero sum: the suppliers lost and Apple won. But because there is so much secrecy around who Apple buys from, it is almost impossible to figure out whether someone just lost orders, or built inventory badly, or just was only part of a pastiche that Apple uses.
Which is why today you have to watch Skyworks Solutions (SWKS) because the CEO, Liam Griffin, knows how to play the game. Listen to this quote from Kris Sennesael, the CFO, his first after a way better than expected quarter, top and bottom: "Strong growth in our broad market portfolio is mitigating the near-term softness at leading smartphone customers (read that as Apple) and the trade restrictions imposed by the U.S. government on a Chinese OEM."
Then to soothe the forecast he goes on and says, "Further based on new program ramps heading into the second half of the calendar year, we anticipate a resumption of sequential growth in the September quarter with sustained momentum into the December period."
OK, let's unpack that. Apple had bought enough from them to be able to make all the devices they needed but not enough to make it so the company could beat their numbers. However, they have other Internet of Things businesses that can offset that weakness and when Apple has to re-order they will be ready and they can blow out the fourth quarter if you just wait.
Now Skyworks is the only company that has so much Apple business that was still able to deliver. And it sources heavily in China so I am sure the hope is that it will not be targeted by the trade talks.
In other words, it's just about the perfect case to see today what people think about tech, specifically the strength of tech because so far it's been a real nightmare for the semis: Intel (INTC) reverses after a blowout, Micron (MU) gets hammered after an amazing quarter, Broadcom (AVGO) basically preannounces and it goes down, Cirrus Logic (CRUS) gives up the ghost and can't rally, just to name a few of the Apple hostages.
So, the stock to watch, the key to this market is Skyworks: If the stock moves up it means there can be a semi that isn't brought low by Apple and the Chinese trade talks -- either or both.
If Skyworks rallies and keeps the rally going it is a powerful signal that tech's OK.
If it isn't then we are going to have a very long day.
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