Following the best week for U.S. stocks since January, stocks are flat this morning, with the S&P 500 (SNPINDEX: ^GSPC ) up less than a point and the narrower, price-weighted Dow Jones Industrial Average (DJINDICES: ^DJI ) up 11 points as of 10:10 a.m. EDT. Investors will no doubt be cheered by Citigroup's (NYSE: C ) second-quarter results, released this morning. Citi is the third major bank (following JPMorgan and Wells Fargo on Friday) to convincingly beat Wall Street estimates, with adjusted earnings per share of $1.25 versus a forecast of $1.17. Lower credit losses and a reversal of loan-loss reserves in the amount of $784 million are more indications that the U.S. economy continues to heal.
Watching for the iWatch
It's coming -- but it could be longer than expected.
At the beginning of the month, I asked, "Is Apple's next "game-changer" on the way?" I concluded: "The evidence suggests the iWatch is on its way. If that is the case, it'll be very interesting to see what kind of market Apple can carve out/create."
In a story posted on its website yesterday, the Financial Times is reporting that Apple (NASDAQ: AAPL ) has, over the last few weeks, begun an aggressive hiring campaign to fill out the team that will develop the iWatch. According to the report, the project is now past the exploratory phase and has "several dozen employees dedicated to its development." However, the report also suggests that the timing of these new hires is inconsistent with a launch this year, and the second half of 2014 is the likely time frame.
If that is the case, the iWatch is unlikely to be the near-term catalyst for a rebound in Apple shares, which are not much above their 52-week low -- and roughly 40% below their 52-week high:
Nevertheless, it will be interesting to see what kind of design magic Apple can weave into this "wearable technology." Although the company has not confirmed that it is developing an iWatch, I believe it is essentially inevitable at this stage. Apple's nearest rival in smartphones, Samsung, has confirmed it is developing a smart watch, and I don't see Apple simply ceding the market to Samsung without a fight. In the meantime, Apple shareholers will have to look to other product upgrades and releases for a lift in the shares.
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