RUSH: The Dow Jones Industrial Average right now 21,992. It was at one point today 22,000, all-time record. And of course that number brought forth all of the negativists who are now claiming, including Greenspan, “It’s gotta burst. It can’t go on. It’s a bubble and it’s gonna blow up and we’re all gonna die. And we’re all gonna be poor, and we’re all gonna lose everything. It’s horrible.”
Now, two things about this: 22,000 stock market. Who is that? Who’s getting rich? Answer, hint, clue: It ain’t the people that voted for Trump. Trump’s out there taking credit for it. He did today in the legal immigration meeting. He was singing its praises. He was talking about what it means for American business and our companies and our industries and jobs and so forth.
Why is the stock market at 22,000? Now, Apple reported great numbers yesterday, and that is a factor. And I know a lot of you don’t want to hear me talk about Apple ’cause you think I’m biased and conflicted. But Apple’s third quarter numbers yesterday were astounding. But it’s not their third quarter numbers that has Wall Street all in a tizzy. It’s the guidance they offered for their fourth quarter, which is calendar third quarter. Apple is like the United States; their fiscal year begins October 1, so their fourth quarter is the September quarter.
And their projection, their guidance — companies are required to do this. They are required to tell analysts and the world what they think their best estimate, not a guess, not allowed to guess, their best estimate of total revenue for the next three months will be. And there are penalties if they are way off either way. So they have to study it and they have to get as close as they can. There is leeway.
Many companies, when reporting their guidance for the next quarter, try to underreport it so that they can always show themselves beating the guidance, which is a psychological positive. The reason is the guidance for Apple was so intriguing to people is because the new iPhone is going to be the first iPhone with a redesign in three years.
And for those of you who don’t keep up with all this, the rumors on the new iPhone have been just all over the place, but the leading, dominant rumor is that it’s delayed, that it won’t be on time. And that even if it is on time, it’s going to be in such limited quantities that nobody’s gonna be able to get it! And if you’re an Apple investor, that’s not good news, because if you can’t get it, you can’t buy it. And if you can’t buy it, Apple doesn’t get the revenue and then their quarter doesn’t turn in as well, as good as the investors want.
Apple’s guidance yesterday is being widely analyzed to mean that the phone will be on time. And that’s why Wall Street has gone nuts. Apple has recorded an all-time high in after-market trading yesterday and opening market trading on NASDAQ today. They projected revenue between 49 and $52 billion, and that is much higher than the same quarter they projected a year ago. That’s the comparison, year over year.
And the phones were on time last year, but, as I say, they were an iterative update design-wise. I mean, the guts of every iPhone is a massive improvement. Every iPhone every year is a quantum leap over the prior year. But in terms of mass consumption people look at the design and if they don’t see that it looks any different then it may not be any different and they may not be as interested in it.
So this iPhone 8 probably — it won’t be called that. I’m predicting it’s gonna be called the iPhone X for 10 or the iPhone Pro. And I think it’s gonna be purposely limited quantity. And if you care why, I’ll get into it later. But you know what this phone is? The iPhone — let’s call it 8 since I think that will help most people understand. The iPhone 8 is actually an iPhone way ahead of its time. There are technologies in this phone that Apple, if it weren’t their anniversary year, would not be bringing out.
Apple has a problem when they manufacture iPhones. Every part in the phone they have to be able to get hold of 200 million of them, 200 million chips, 200 million displays, 200 million hard drives or NAND flash storage, 200 million of everything. That limits the technology that can go into the phone. The newer the technology, the tougher it is to mass produce at affordable prices. The newer the technology the less of it there is because it’s in its early phases.
But because this is in an anniversary year, I think Apple is doing something they’ve never done. I think they’re building a phone that has technology in it that they probably wouldn’t do this year if it weren’t — for example, best guess — and it’s still a guess, but it’s educated. In this phone, the fingerprint ID is gone and instead facial recognition is going to be how you secure the phone and do Apple Pay.
3D infrared facial recognition. Remember, facial recognition has to work at different angles with the phone laying on the table. It has to work at night. It has to work in the dark. It has to work in every possible lighting scenario you can imagine.
So it’s gonna be IR. This technology cannot be mass-produced. I don’t think they can make 200 million, at least in the first six months. I think this phone is gonna be priced through the roof. This phone might — at its peak, at its maxed-out configuration — cost as much as $1400 to limit demand because they can’t make 200 million of them. So they’re gonna have the 7s and the 7s Plus and then this new one which everybody is gonna want. It is gonna be in constant shortage. They’re never gonna be in balance on supply-demand with it, and Wall Street’s gonna love that.
It’s just like their AirPods. It came out last October and it still takes six weeks to get them when you order them. Last year, the iPhone 7 Plus, the big one, was announced on launch day. But you couldn’t get it if you missed… They only had two or three million of them on launch day. If you didn’t get one of those, it wasn’t until November. It’s gonna be the same thing with this iPhone 8 or X or Pro or what have you, but it’s gonna be something. It’s gonna be smaller. It’s gonna be the same size as the iPhone 7, but it’s going to have a screen that’s about as large as the 7 Plus.
So people hate the big phone but buy it for the big screen. They’re gonna be able to have two in one. I’m not particularly crazy about a phone that small, but I’m not the mass market. It’s gonna be big. There’s brand-new battery technology in it. It may have battery life that’s equitable or similar to the 7 Plus, which is… The tech in this phone, just trust me — and Wall Street is all over this. The reason for this, folks, is that Wall Street… It’s not just Apple. Wall Street’s going crazy here, 22,000.
But it’s interesting that the people getting rich off of the Dow Jones Industrial Average, the stock market, are not Trump voters, are they? I mean, some of them are in there. But it might be accurate to say that the people who are benefiting from this massive run-up in the stock market are actually people that did not vote for Trump and do not support Trump. It doesn’t mean anything. It’s just a little dichotomy. It’s an interesting thing to me. I don’t think it’s gonna matter. It’s just an interesting observation.
But Trump’s out there touting it, and there are many reasons why the stock market is up. There’s another reason besides all this Apple stuff. The other reason is they are expecting massive tax reform. This massive expansion of the stock market (we’ll call it the Dow Jones Industrial Average), do not doubt me: Much of it — not all of it, of course. Much of it is rooted in the belief that there will be significant corporate and capital gains tax reform, and they have believed this ever since Trump was elected.
It was a major part of his agenda during the campaign, and he has continued to discuss it, and it remains a focal point in the Trump agenda. But it doesn’t look… Newt Gingrich has another tweet out today (summarized): “If you don’t get this done, say ‘hi’ to Speaker Nancy Pelosi,” if you guys don’t get tax reform done. Well, there’s a problem here: The Republicans on Capitol Hill don’t want to help Trump get anything done. I have been trying to tell people this for the last six months. Well, let’s be conservative and say the last four months.
It has been abundantly clear to me that the Republicans are not interested in Trump succeeding. Certainly the Democrats aren’t. That’s not even arguable. Now, the Republicans not interested in Trump succeeding? There are many reasons. One of the reasons is that they are members of the establishment. The establishment doesn’t want the outsider succeeding. Been through that drill; you know it. There’s another possibility. Trump’s approval number has fallen to 38% at Rasmussen. Rasmussen is the, quote-unquote, “friendliest” poll that Trump has had.
When all the Drive-By polls had Trump at 42, they had him at 48. When the Drive-By polls plunged to 40, Rasmussen had him at 45. Now, Rasmussen has him at 38. This is lower than at any time in the Obama administration. What this means is that Republicans on Capitol Hill are looking at their president saying, “This guy is not popular. There’s no way I’m gonna line up with him! He’s not popular.” So it’s a double whammy with Trump attempting to get support and help from the Republicans in the Senate.
Now, Paul Ryan (interesting) got on a horse and drove around the Mexican border and all of a sudden has become a big proponent of a wall now. Did you see that? (interruption) Oh, yeah! Cowboy Paul Ryan, a big advocate for the wall now. There’s a picture of him on the horse. Well, he not on the horse; he’s standing by the horse. Presumably, he just got off the horse. Maybe was getting on the horse. But he’s become a big advocate for the wall.
But the Senate Republicans are just not interested in helping Trump, and I think it’s a combination of the fact it’s establishment versus outsider, and the fact that he’s unpopular in their eyes. Not with his base, but with everybody else. And what sense does it make to latch on to some unpopular president’s agenda? It gives ’em a natural out on things like what he wants to do for health care, tax reform, and other things.
RUSH: This is Trump. After the details of the immigration plan were announced by Cotton and Sonny Perdue, Trump talked up the stock market and the economy.
THE PRESIDENT: The stock market hit an all-time record high today, over 22,000. We’ve picked up substantially now more than $4 trillion in net worth in terms of our country, our stocks, our companies. We have a growth rate, a GDP which has been much higher than, as you know, anybody anticipated, except maybe us. But it’s gonna go up. It’s gonna go higher too. Foxconn is going to spend $10 billion in Wisconsin and other places. And I think the $10 billion is gonna end up being $30 billion. They make the iPhones for Apple and others and it is a truly incredible company. So we have a lot of things happening that are really great.
RUSH: Now, Foxconn, they are negotiating to build a factory in a pretty wide area of southeastern Wisconsin. They’re not gonna make iPhones there. Those will remain manufactured in China. What the Foxconn plant will produce in Wisconsin is LCD screens, which, if you have an iPhone now that’s what’s in your screen. But they’re not gonna be making any for the iPhone.
What they’ll make is LCD screen for TV sets, for the dashboard screens of automobiles and other assorted and sundry devices that use LCD. The trend in iPhone displays now — well, mobile phone displays, is for OLED, which is a different kind of display, light emitting diodes. It’s much tougher to make. The yield rate on them is very low, so they’re expensive. And that’s another reason why the iPhone 8 probably will be limited in quantity.
Samsung’s the only manufacturer of those things, and they haven’t reached mass production level on ’em like they have LCDs. But still the Foxconn deal is a big, big deal, and I don’t think it’d be happening if Trump hadn’t made a push during the transition, the early days of his administration for things like this. There’s no question that this is not something Obama would have pursued. And I don’t think too many other people would have, because they would have not thought it possible.
Why would a Taiwanese company with most of its business in mainland China and Hong Kong open a plant in the United States? But for the reasons that Trump has elucidated in the past and just the energy he’s put into it, it looks like it’s gonna happen. There are still some things that have to be overcome, like they’re asking for huge tax breaks in Wisconsin, Foxconn is. And there’s gonna be opposition to those because they’re pretty significant, the tax breaks that are being requested.
It will create beaucoup jobs, but people are gonna say, “What is it gonna cost to create those jobs in terms of the tax base?” I think it’s all gonna end up working out. I think Foxconn is gonna end up locating in southeastern Wisconsin, but it’s gonna be a battle. But, again, bottom line, I don’t think it would have even been up on the radar if Trump had not spearheaded such thinking and such an effort.
RUSH: Steven in Boston. It’s great to have you, sir. How are you?
CALLER: I’m great, Rush. Thanks so much for taking my call.
RUSH: What part of Boston do you live in, Steven?
CALLER: I actually live west, metro west Boston. Allston, Massachusetts.
RUSH: I found a great cigar bar in the north end.
CALLER: Oh, yeah.
RUSH: I’d have to get the matches from my briefcase to pronounce the name, but I was stunned. It’s on a street with massive, great restaurants and so forth, just a great part of town.
CALLER: Little Italy.
RUSH: Yeah, exactly. Exactly. And the cigar bar is right in the middle. You go downstairs and it’s this massively great room. Sounds like you’re familiar with the area, which you would be.
CALLER: I am.
RUSH: It was new to me. Anyway, what’s up?
CALLER: Anyway, I wanted to share a little story that I found interesting and thought you might find interesting also. I was having lunch with my cousin and her husband after golf. We stopped in for sandwich and a beer, and they know I’m obviously a Trumper, and they are as liberal as you can possibly get. I don’t usually talk about politics, but usually she’ll sneak something in, some type of dig, and she did.
And I said, “You know, June, what has changed in your life since Trump has been elected, good or bad? Just name one thing.” And they both looked at me and they couldn’t say anything, and then she all of a sudden says, “My 401(k) plan is going ballistic.” And I said, “Bingo, to quote James Carville, ‘It’s the economy, stupid.'” And boy, you wouldn’t believe how fast they changed the subject out of politics. So I think I found how to beat these guys. I mean, you usually can’t win speaking with a liberal. It’s useless debate.
RUSH: Now, let me make sure I understand. You pointed out to them that their 401(k)s are going through the roof during the Trump presidency.
CALLER: They pointed it out to me and I said bingo.
RUSH: Well, yeah, you should have guilted the hell out of them. You should have said, “How in the world can you sit there and brag about your 401(k)s going up while Trump’s in the White House and people are suffering? Trump’s an idiot, right? And you’re benefiting from it? You’re hypocrites.” You know, that’s how I would deal with ’em. Everybody has their own way. But they wanted to change the subject, huh? There’s no way you are a gonna change their mind. They’re just gonna change the subject.
CALLER: No. It’s useless. And that’s why I really don’t even talk politics. I live in Massachusetts. I mean, you know, I think the last four heads of the Senate are indicted, convicted felons.
RUSH: Well, as you learned, I mean, when you talk to liberal Democrats, you’re not really talking to their minds; you are talking to their emotions and the massive amount of disinformation they have absorbed and believed. And that’s the biggest obstacle. They believe the rotgut that they have heard in the media they consume. They don’t question it because they’re not critical thinkers; they just absorb it. And then they regurgitate it, but they’re not able to back it up or explain why.
And if you don’t accept it, then they want to change the subject, because you’re too stupid, you’re too closed-minded, you’re hopeless, you’re impossible. Your technique is especially effective, though, when you point out their 401(k)s never had this happen when Obama was in the White House. That’s why I would have guilted them. I would have had fun with that, since they do that to everybody else.
Ed, Stockton, California. Great to you have. You’re next. Welcome to the program.
CALLER: Thank you, Rush. I had another take on the earnings forecast for Apple. About a year ago, my nine-year-old son was diagnosed with type 1 diabetes, and for the past year we’ve learned to deal with that. One of the big rumors out there, as far as the diabetic blogs, is this Apple generation 3 watch is gonna have a noninvasive glucose monitor as part of the feature. And if that is true, that is gonna be a huge, huge selling point to the diabetics in this country. And to accompany that watch everybody that needs the watch as a child that you normally wouldn’t provide an iPhone for is gonna be packing an iPhone with them to go along with that watch. That data would be invaluable.
RUSH: This is true, this is absolutely true. What I’ve heard about this — and it would be watch series 3, you’re right. Watch series 3 will come out in September or October along with the new phones. Nobody knows what it’s gonna contain specifically. It’s not nearly the interest to probe the supply chain to find out the intricate new ingredients. But this glucose monitor has been rumored in a new watch band. The thing about the Apple Watch is the sensors are the sensors, and there’s no redesign contemplated, but the watch band holds the potential for additional sensors, additional external batteries.
RUSH: Now, on this noninvasive glucose monitor that is being rumored. Much of what Apple is doing is rumored because of the fascinating interest in it. What I’ve heard about this is — and I don’t think it’s imminent. I don’t think they’re there yet, a noninvasive glucose monitor. For people with diabetes (type 1 or type 2), you have to prick the skin, get a blood drop, put it on a stick. The stick reads the glucose count, the blood sugar. Whoever comes up with a way to do this without pricking the skin and taking a drop of blood is going to (chuckles) own whatever he wants to buy.
Apple is rumored to be working with the FDA on this. Now, what I’ve heard is that the sensor or the technology to do this will not actually be in the watch, that it’ll have to be in a band, a special band where the — we’ll call it the “sensor” for now. I don’t know what actually the technology will be. But the watch band holds all kinds of expansion possibilities. The watch is a finite space. You need a battery in there that will power the thing. You need the chip.
You need the hardware inside that watch. There’s already the heart rate monitor, a number of other sensors that are on the actual bottom of the watch that come in contact with your skin. I don’t think that a glucose sensor is part of them, although they can add these things as they are developed and invented. But I don’t think the hardware of the watch is gonna change. The design, the industrial design of the watch isn’t gonna change from everything I’ve heard.
Now, watch OS 4, which is the next software upgrade (which is in beta and I’m running it right now) has a couple of fascinating additions but nothing along the lines of that. Of course, that wouldn’t show up in a beta. What is there is, like, a new ski workout in addition to swimming workout that they introduced last year. But the sky’s the limit on this, and who knows what they’re working on. When I hear that they’re working on possibly of glucose monitors noninvasive in the watch band, you can put an external battery in the watch band.
There’s a small, tiny little port on the watch (if you know where to look for it) that is used for service if you have to take it to one of the “geniuses” at the Genius Bar. The customer/consumer is never supposed to touch the thing. If you do, you’re voiding the warranty and everything. But man, they’re on the cusp. This augmented reality that they’ve already introduced in the beta software for the iPhone and the iPad? It will blow your mind what you can do with it right now on existing iPhones. I love to demonstrate one thing.
Apple has, as part of their Maps app, something called Flyover. They bought a company that creates 3D maps. They’re not pictures. They’re actual 3D maps. In the cities where this is, you activate/turn on the 3D on the map and you can actually see downtown Paris or Rome or San Francisco, anywhere, in 3D. Flyover is an automated feature that takes you on a tour that Apple programs. You don’t have to touch anything. It just happens. So when you call up Flyover, rather than cap on the button to start it if you’re running an iPhone…
I think it’s 7, even a 6s, but you have to be running the iOS 11 beta. You can actually walk through downtown Rome without ever touching the phone. Just walk, and it will appear as though you’re in Rome and walking down the street. You could walk to the Vatican, you could walk to the Colosseum, and you can pan left and right just holding the iPad or the iPhone and (because of the augmented-reality chip) you will actually change what you see of the city that you’ve called up. In other words, you don’t have to use touch controls on the screen for any of this to happen.
And as you walk forward, you get closer. You appear to get closer to what you see on the screen. If you walk backwards, you get further away from it. This is just rudimentary stuff. What is gonna happen by the end of the year when this gets released in September then developers create apps for it? It’s gonna be mind-boggling! Both the game and the commercial applications are gonna be possible here. We can’t even conceive of it. So the fact that Apple may be working on a glucose monitor that’s noninvasive?
They’re rumored to be in talks with the FDA, and you have to have the FDA approval for that. When you have a consumer product that then becomes regulated by the government, the FDA, that is a massive change in relationship between the company and the government. It’s a big step for them to take if they decide to do it. But the caller was right. If they were ever to do it, you need an iPhone for the watch to work. If you’re gonna have a six-, eight-, 10-year-old kid who has type 2 or type 1 diabetes, for the watch to work, for the glucose monitor, the kid’s gonna have to have an iPhone.
The point is the sales potential here, and his point was that Wall Street’s looking at things like this, too, and anticipating massive growth from Apple — and, of course, growth projections? Wall Street lives and dies with these things. Not current results, but what they think the future holds. Anyway, I could spend a lot more time on all of this, but I know many of you have an anti-Apple bias simply ’cause I like it.
You’re get tired of me talking, right? (interrupting) Or do they not? (interruption) Well, not Samsung people. But I mean the Stick-to-the-Issues Crowd. Me talking about Apple is the same thing as talking about my last trip to the golf course. “Stick to the issues!” Or they say, “Apple’s a bunch of commie leftists. What are you doing even promoting them? You’re a traitor!” I hear that too.