MCD

The S&P 500 index added more than 100 points since the beginning of the week, leaving the broader Wall Street market up 1.75% as of Wednesday evening. Corporate earnings were still coming in better than sceptics feared. Advancing performances succeeded the number of declining stocks by only a 11-to-10 ratio on the New York Stock Exchange (NYSE) on August 6, yet 145 new session highs were detected vs 65 new lows. Bets for a September and December rate cuts made the rally easier to go on, but up to 3.75% gains of McDonalds and Apple's surging by more than 5% paved the way to climb higher.

Of course, Apple is very big, and so its fresh positive changes in dynamics is most influential for other techs. But the example of Apple, which rose faster than many others, is not indicative, just because the iPhone maker grew not on any kind of solid earnings numbers. Its quarterly report on the night of August 1 was received coolly by the market crowd and initially led to a decline in its stock price, with a three-day retest of a $200+ support area. Later a rebound took place rather on promises to invest more in the further extension of Apple's U.S.-based manufacturing program to repatriate more capitals and save costs on transborder levies. Well, even if this pledge is fulfilled, the results will not affect the financial well-being of the company anytime soon.

On August 6, Apple confirmed an additional $100 billion investment agreement by its CEO Tim Cook with the White House administration. This may enhance Apple's previous commitment to invest $500 billion into the U.S. economy to as much as $600 billion over the next four years. Apple is going to produce 100% of iPhone and Apple Watch cover glass in America, but that was all the bright side of the Apple-related agenda. This piece of news may allow Apple's share price to rise maybe above $225, but whether a stable money flow will resume from the U.S. or China is still a question for those heirs of Steve Jobs which have lost so much of his innovativeness. A few years before, the same Tim Cook referred to potentially manufacturing iPhones in the U.S. as being not feasible because China locations had much more superior capabilities. Now he has to adapt to changing conditions, but do they promise benefits or only reduced damage?

McDonald's success in the bullish earnings' parade is another matter. If Apple is only planning to earn more money vs last year, McDonald's has already done it. Their top and bottom lines of $3.19 equity per share on quarterly revenue of $6.84 billion not only propelled the famous food chain business to 7.4% and 5.4% YoY growth, but also put it on track to nearly hit an all-time record of the last Christmas season, even though it's not Christmas yet. If you are interested in more details on how they achieved it, then a limited-time Happy Meal offer tied to the "Minecraft" Movie, McCrispy Chicken Strips as a permanent menu item and the $5 meal deal combined with the "buy-one, add-one for $1" offers were cited as drivers. Even MCD sales in its so-called "business segment" where classical brand restaurants are operated by local partners, reportedly jumped 5.6%, with demand recovery also in countries like the U.K., Canada and France. This is much more indicative of the overall consumer spending sentiment for a larger number of retailers, even when considering the example of budget-conscious diners amid some global uncertainty.

That's why yesterday's 3% to 3.5% gain in McDonald's stock is worth more to us as a more important psychological contribution to a future railing mood of traders than 5% or more in Apple stock. Strong Buy recommendations for trading shares of McDonald's, with an average target price levels from leading investment houses above $330 per share, means an extra 7% and may support a similar increase in targets for the S&P 500, from currently 6,350 by the same 7% to about 6,800.