Home » Money

Global Stocks Climb Ahead of US-China Trade Meeting

07 January, 2019, 06:15 | Author: Sara Gill
  • Apple's stock has fallen 32 per cent from an October peak to its close of US$157.92 on Wednesday amid growing concerns about the iPhone

Apple CEO Timothy Cook announced on Wednesday night that Apple revised lower its forecast of revenue to 84 billion USA dollars with a gross margin of about 38 percent for the first quarter of fiscal year 2019, which ended on December 29.

Cook put the blame on weaker economic growth in China. "The question is to what extent this is more Apple-specific?" He said this trade uncertainty "appeared to reach consumers", with customer traffic in China declining. "Any company that does business in China will feel the impact of this".

Tech's move higher took place after the sector fell 5.07 percent on Thursday, its worst daily performance since August 18, 2011, when it fell 5.35 percent.

The announcement comes as China and the US try to strike a deal on trade.

The clash reflects American anxiety about China's emergence as a competitor in telecoms, solar power and other technologies and complaints by Washington, Europe and other trading partners that Beijing's tactics violate its market-opening obligations. The news provided some relief for equities markets, which faced pressure Thursday amid intensifying fears regarding the health of the global economy.

But that's missing Apple's biggest problems, according to a new report from Nicolas Baratte and Cherry Ma, analysts at Hong Kong-based CLSA, who point directly to the iPhone's climbing average selling price (ASP) and increased competition from the likes of Huawei and others. That reversal of fortune could reinforce fears of a global economic slowdown.

"Apple makes their product in China", Trump said.

A day after plummeting on concerns about Chinese growth, markets recovered on improved sentiment as the USA and China are set to resume trade talks, U.S.jobs numbers soared in December and the Federal Reserve chairman suggested it may slow rate hikes.

The market slide and the Apple shock "hammer home the message that a trade war will be damaging to the United States economy", he said.


The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September previous year to seize the No. 2 spot behind industry leader Samsung, according to the research firm International Data Corp.

"This provides solid evidence of how slowing economic growth and a trade war make the best death cocktail for sentiment", said Naeem Aslam, chief market analyst at Think Markets UK Ltd in London.

Cook attributed much of the "shortfall" in the outlook to struggles in China that he pinned on the economy and "rising trade tensions" with the US.

It's a natural progress for Apple Inc.to see a drop of demand from emerging markets as markets get saturated and a trade war looks like a background factor, said Rockefeller. Build those plants in the US.

The S&P 500 posted no new 52-week highs and 4 new lows; the Nasdaq Composite recorded 9 new highs and 58 new lows. As of 15:30 GMT, Netflix had gained 5.9 percent in value while Intel was not far behind in gains after rising 4.8 percent. Still, manufacturing gauges are weakening as tariffs start to bite - and that's happening in China too.

With over 20 factories, multiple research and development centers as well as logistics and parts centers, heavy equipment maker Caterpillar employs over 10,000 people in China, accounting for over 10 percent of its total employment. Facebook, Amazon, Apple and Google-parent Alphabet all rose more than 2 percent.

In the fiscal year ending September 30, 2018, US telecommunication player Qualcomm Inc. earned 15.149 billion dollars of revenues from the Chinese market, which stands for as much as two-thirds of its total.

Top officials from United States and China are now involved in trade negotiations.

Recommended:



Popular

Trump says he needs to deal with Dem leaders to end shutdown
Trump's demand for billions for the barrier has forced a partial government shutdown that is now in its third week. With his negotiators preparing for the afternoon session, Trump said he didn't expect it to produce a resolution.

Samsung Galaxy M20 spotted at the FCC
But another leaked information claimed Samsung gave much attention to improving the upcoming smartphone's battery . The South Korean smartphone maker refused to add a notch on any of the premium smartphones it introduced in 2018.

Solskjaer salutes 'top, top performance' from in-form Pogba
Newcastle is a fantastic club, fantastic crowd, you expect them to attack you but Victor Lindelof and Phil Jones were fantastic. United will now move on to much tougher challenges, starting with the Premier League visit to Tottenham a week on Sunday.

Kawhi Leonard's mom gets heated with Spurs fan during son's return
This game with the Spurs and Raptors has been on everyone's mind since the huge blockbuster trade that went down this past summer. And his old coach, I'm guessing, will always have a special place in his heart for Leonard for what they accomplished together.

Trump mocks Elizabeth Warren again over Native American heritage
Iowa is a popular first stop for presidential candidates as it is the first state to participate in the primaries. Trump has routinely gone after Warren for her Native claim, mockingly calling her " Pocahontas ".

Apple is trying to steal business from China’s homegrown smartphone players
Apple , indeed, has been hammered by China's lackluster growth and economic uncertainty posed by president Trump's tariff war. Even the devices Apple already makes in India - the iPhone SE and iPhone 6S - are out of reach for most people.

Here's why we didn't see the monsters in 'Bird Box'
Netflix planned to launch 80 original films in 2018 heading into the year, after releasing just eight films the year before. This assertion attracted some side-eyeing from those familiar with Netflix's general behavior in reporting.

Tesla Still Has Over 3,000 Models 3s in US Inventory
Customers who take delivery of their cars between January 1st and June 30th, 2019, will only be eligible for a $3,750 tax credit. It can take weeks or months between the time a Tesla is ordered and when it's delivered.

Spacey: Court appearance would 'amplify' negative publicity
Spacey was sacked from the show in 2017 after a number of sexual assault and misconduct claims surfaced against him. Fowler, also known as Kevin Spacey ", a statement from the Cape and Islands District Attorney office read.

China court orders retrial for Canadian jailed for drug smuggling
Since then, China has arrested two Canadians on charges of endangering national security in what appeared to be retaliation. Meng was arrested at the request of USA prosecutors and faces extradition on charges of violating sanctions on Iran.