Markets Right Now: Apple leads tech stocks sharply lower

Image Source Saim_Ray010 Reddit

Image Source Saim_Ray010 Reddit

At least 15 Wall Street analysts lowered their price targets on Apple's stock before markets opened today, with one slashing its price target by $75 to $200 per share. It was the first time since June 2002 that Apple issued a reduction in its quarterly revenue forecast.

In a letter to investors on the topic, Apple CEO Tim Cook squarely laid all the blame on a lower number of iPhone sales for the quarter.

"Our non-iPhone businesses have less exposure to emerging markets", he wrote.

For the last two days in tech town nearly everyone has had their say about Apple and its share of "troubles" with the iPhone. The Christmas and New Year holiday period is traditionally an especially busy time for Apple as it follows the release of new iPhone models.

The precipitous decline in Apple shares was accompanied by plunges for companies that produce parts for Apple devices. The world's second largest economy, China is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.

He also said Apple will launch a few initiatives to stimulate iPhone sales, including easy trade-ins of phones in Apple Stores, more financing plans and greater help with the transfer of data from old to new phones.

Market jitters even extended briefly to the Brexit-battered pound, which tumbled to a 21-month low close to $1.24 overnight against the U.S. dollar in a "flash crash" triggered by an exodus from currencies considered riskier - before very quickly recovering the losses to return to around $1.26.

Technology stocks are leading a sharp decline in early trading on Wall Street after Apple said iPhone sales were slowing down in China. In the USA government bond market, a typical safe-haven, the yield on the benchmark 10- year, which moves inversely to the bond's price, sank to an 11-month low.

In August, Apple became the first US firm to reach a market cap of more than $1 trillion, and coasted through most of 2018 as the highest-valued company in the world.

Although the iPhone has not been affected directly by the tariffs, Mr Cook said it had put a strain on the Chinese economy.

Apple cut its revenue forecasts for the key end of year quarter late Wednesday, citing the unforeseen "magnitude" of the economic slowdown in China. We knew this would create a hard compare for the first quarter of 2019, and this played out broadly in line with its expectations.

But even the bright spot of services may be in for a beating, according to one analyst who has touted services as a hidden gem at Apple.

The iPhone has been Apple's chief moneymaker for years, accounting for almost 60% of Apple's total sales in the three months ending in September.

But after decades of expansion, the Chinese economy is slowing down.

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