the Dow Jones Industrial Average (DJINDICES: ^ DJI) It rose 2.1% at 1:50 pm EDT on Monday despite the extreme uncertainty surrounding the pandemic and the recovery of the US economy. The US states, including Florida and Texas, have reported a record number of confirmed cases, and reports indicate that hospitals in some areas are running out of ICU capacity.
Driving the highest Dow on Monday was Apple (NASDAQ: AAPL), which received two analyst price target bumps. Disney (NYSE: DIS) Shares also rose despite news that the company was re-closing its Hong Kong park due to an increase in COVID-19 cases.
Apple shares hit new high
Apple received two ups and downs in analyst’s target price on Monday that helped push the stock to a new all-time high.
Morgan Stanley raised its Apple price target from $ 340 to $ 419 and reiterated its “overweight” rating. Morgan Stanley analyst Katy Huberty argued that Apple’s iPhone exchange program, as well as the high resale value of iPhones, gives the company a competitive advantage. Huberty sees the exchange program driving adoption of 5G iPhones later this year.
Wedbush is even more bullish on Apple, raising its price target from $ 425 to $ 450 and maintaining its “top performance” rating. Wedbush analyst Daniel Ives expects 5G to lead Apple to a $ 2 trillion market cap next year. Ives has become more confident in the iPhone growth story after positive channel checks in Asia, and sees China as an important component of the growth story. Wedbush is also bullish on Apple’s services business, assigning a valuation of $ 600 billion to $ 650 billion to Apple’s fast-growing portion.
None of the analysts seems concerned about the impact of the pandemic and the recession on the demand for iPhones later this year. If the pandemic continues in the United States when Apple launches its 5G iPhones, the demand could be severely muted.
Apple shares rose 2.9% in the afternoon. Including Monday’s rally, tech stocks have now risen approximately 35% since the beginning of the year.
Disney closes Hong Kong park again
Disney has reopened its Disney World resort in Florida despite the state releasing record numbers of confirmed COVID-19 cases. In Hong Kong, where daily cases have started to recover again, Disney is re-closing Hong Kong Disneyland.
Disney’s Hong Kong Park will close on July 15. The Hong Kong government has closed various types of businesses and group meetings limited to four people in response to an increase in COVID-19 cases. Hong Kong Disneyland Resort hotels will remain open with a lower level of services.
Hong Kong reports a few dozen daily COVID-19 cases, an increase enough to provoke aggressive government action. Florida recorded more than 15,000 new cases on Sunday. New closing orders may be unavoidable if the state cannot control the virus, which would likely mean that Disney World would need to be closed again.
Disney parks are a critical part of their business, and their American parks are particularly important. Since the United States cannot contain the virus, Disney’s ability to keep its parks open remains highly uncertain. Disney shares rose 0.4% in the afternoon despite Hong Kong news.