Did Apple Outsmart Investors? A $17 Billion Goof by the Street?

May 29th, 2013

by Chris Kimble

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The Power of the Pattern suggested back on the first of May that rates were ready to blast off and Bonds could get hurt big-time (see post here).

At the same time the pattern was suggesting yields were ready to blast off, Apple came to market with $17 Billion in bonds, the largest corporate bond offering in history (WSJ on Apple Bonds).

Was the timing almost perfect by Apple, coming to the market 30 days ago, right before the 10-year yield rallies 30%? So far it looks like Apple had great timing in selling these bonds.

Speaking of a bond rally, the chart below reflects that the yield on the 10-year note has rallied 30% since the first of May!

The S&P 500 has had a nice month, up almost 5%, yet that is 25% less than the yield on the 10-year note.

The Pattern one month ago reflected that an "inverse head & shoulders" pattern in yields could be forming. Despite the 30% rally in yields, the neckline is yet to be broken to the upside.

If the "neckline" does break to the upside, the 30% rally in yields will look small going forward, and Apple's decision to sell the $17 Billion in bonds will look very smart!

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