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Apple just confirmed Trump's trade war is hurting global growth

Bucky

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More and more companies are confirming that President Trump’s trade war is slowing down the global economy.

On Wednesday, Apple (AAPL) shocked markets when it said revenue in its holiday quarter would miss expectations.

This news sent Apple shares down as much as 7% after hours and confirmed the market’s biggest fear about the global economy — that trade is slowing down businesses around the globe.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Apple CEO Tim Cook said in a letter to investors published after the market close on Wednesday.

“In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

https://finance.yahoo.com/news/apple-just-confirmed-stock-markets-225049102.html

The numbers do not lie. It will be a brutal day for the stock market on Thursday. Trump, this should be your wake up call. The "glitch" in December will continue on in 2019 if you don't wake up.
 
https://finance.yahoo.com/news/apple-just-confirmed-stock-markets-225049102.html

The numbers do not lie. It will be a brutal day for the stock market on Thursday. Trump, this should be your wake up call. The "glitch" in December will continue on in 2019 if you don't wake up.

The drop in Apples stock price has been dramatic

From over $1 trillion back in October, to $680 billion this morning. The P/E ratio on Apple is around 12 which is very reasonable. But if Apple starts to lose market share in the phone industry, it's major source of profits can be cut dramatically. The services it sells would be affected as well (tied to the IOS ecosystem)
 
https://finance.yahoo.com/news/apple-just-confirmed-stock-markets-225049102.html

The numbers do not lie. It will be a brutal day for the stock market on Thursday. Trump, this should be your wake up call. The "glitch" in December will continue on in 2019 if you don't wake up.

Not sure this can be pinned on Trump. According to Apple, the decline in sales is just a result of the fact that Chinese consumers have not bought into the idea that they need to “upgrade” their phone when Apple releases a new model. I think Apple brought this on itself when it released its new model at double the price of its previous one.
 
In a way Apple did this to themselves, their entire model of business rests on the consumption of annual (or about) updated key products almost entirely made outside of the nation. While they have plenty of revenue streams outside of iPad, iPhone, and Macbook sales they by majority expect this model of operation to continue year on year.

Then Trump comes along starting a trade mess with China and they miss earnings.

Apple is not alone in this, they just happen to represent a large chunk of this industry and tend to grab headlines. Quicker than companies like 3M, Tesla, Harley-Davidson, Ford, Polaris, QualComm, Texas Instruments, Intel, Western Digital, Applied Materials, NVidia, and many others that are all having varying degrees of revenue impacts from tariffs on products and materials.

Anyone with an IQ above their shoe size knew this sort of thing would happen, the level of business exposure linked to China dictated the risk involved with someone like Trump coming along and trying to change things. We knew there would be winners, and there would be a list of losers.

Now it is Apple's turn.

APPL going from a 52-week high of $233.47 down to today's session of about $144.98 is not a surprise. Over the past one month it has fallen from $184.82 to these session lows. The good news is we are above the 52-week low for Apple but at the same time not by much.

We might be seeing investors pricing both Apples exposure to China and general market conditions from Trump's trade war overall, the government shut down with no end in sight, corporate debt concerns, Fed interest rate handling this year, the list goes on.

What did everyone think was going to happen?
 
Suckers.

https://twitter.com/MikeDorning/status/1080850171418816513

Mike Dorning@MikeDorning

BREAKING: Trump economic adviser Kevin Hassett predicts "a heck of a lot of'' U.S. companies will join Apple in announcing lower than expected earnings because of trade war, per @ToluseO

7:35 AM - 3 Jan 2019
 
Not sure this can be pinned on Trump. According to Apple, the decline in sales is just a result of the fact that Chinese consumers have not bought into the idea that they need to “upgrade” their phone when Apple releases a new model. I think Apple brought this on itself when it released its new model at double the price of its previous one.

Yes, it's on Trump.

A smart person gathers data like this and then decides it's not time to do even more damage to the sales prospects of important companies such as Apple.


I'm tired of people excusing Trump's destructive behavior by saying things like "global growth was slowing anyway" as if somehow that made it okay for Trump to accelerate all the issues the world economy is already facing. "Hey, China's growth is slowing down -- they might not be able to buy as much of our product as they used to -- sounds like a good time to make it even harder for our companies to unload their products overseas." That's not what a person should do. But that's what Trump did. This is on Trump.
 
Yes, it's on Trump.

A smart person gathers data like this and then decides it's not time to do even more damage to the sales prospects of important companies such as Apple.


I'm tired of people excusing Trump's destructive behavior by saying things like "global growth was slowing anyway" as if somehow that made it okay for Trump to accelerate all the issues the world economy is already facing. "Hey, China's growth is slowing down -- they might not be able to buy as much of our product as they used to -- sounds like a good time to make it even harder for our companies to unload their products overseas." That's not what a person should do. But that's what Trump did. This is on Trump.

Apple’s failure to convince Chinese consumers to buy phones they don’t need at double the price of their last phone - which Apple admits is the root cause of decline in revenue - is not Trump’s fault. The trade war is just a convenient scapegoat. It seems some people forget that Tim Cook made the media rounds just a few months ago to announce that Apple secured exemptions for its products.
 
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Apple’s failure to convince Chinese consumers to buy phones they don’t need at double the price of their last phone - which Apple admits is the root cause of decline in revenue - is not Trump’s fault.

Trump taking actions to accelerate both the slowing down of China's economy and the expense of American products is Turmp's fault.

If our companies already see a challenging landscape ahead of them, then it's not a good idea to throw up roadblocks and pepper the area with landmines. But that's what Trump did.

His fault.
 
Trump taking actions to accelerate both the slowing down of China's economy and the expense of American products is Turmp's fault.

If our companies already see a challenging landscape ahead of them, then it's not a good idea to throw up roadblocks and pepper the area with landmines. But that's what Trump did.

His fault.

It seems some people forget that Tim Cook made the media rounds just a few months ago to announce that Apple secured exemptions for its products. So what exactly are you blaming Trump for again? Sorry, but you can’t saturate a new market with your product then blame somebody else for your declining revenue when nobody wants to immediately go out and spend $1500 to replace the phone they just bought.
 
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It seems some people forget that Tim Cook made the media rounds just a few months ago to announce that Apple secured exemptions for its products. So what exactly are you blaming Trump for again?


Trump is attempting to hurt China. He's attempting to slow down their growth. He doesn't get that when he hurts China, he hurts our companies who sell in China.

The world economy is facing challenges, challenges we might be able to ride out. But Trump's actions are lowering our chances of riding it out. Hurting our farmers. Hurting our manufacturers. Hurting the people who did get exemptions. Hurting the people even more who didn't get exemptions. Trump is intentionally causing damage, without seeming to realize that suffering world populations will be poorer customers than well-off world populations.

And I'm fed up with people like you saying, "Well, that company was already facing challenges, so what did it matter if Trump increased the price of them doing business. If they couldn't survive Trump making it even more challenging for them, then that's their fault."
 
Trump is attempting to hurt China. He's attempting to slow down their growth. He doesn't get that when he hurts China, he hurts our companies who sell in China.

The world economy is facing challenges, challenges we might be able to ride out. But Trump's actions are lowering our chances of riding it out. Hurting our farmers. Hurting our manufacturers. Hurting the people who did get exemptions. Hurting the people even more who didn't get exemptions. Trump is intentionally causing damage, without seeming to realize that suffering world populations will be poorer customers than well-off world populations.

And I'm fed up with people like you saying, "Well, that company was already facing challenges, so what did it matter if Trump increased the price of them doing business. If they couldn't survive Trump making it even more challenging for them, then that's their fault."

I’d youre fed up then maybe you should make the effort to gather the facts before making accusations. Apple’s products were exempt from the tariffs and it predicted that it would have a decline in revenue precisely because of the reason I mentioned. The only story here is that it turned out to be larger than anticipated, but you can’t blame tariffs for that.
 
Trump is attempting to hurt China. He's attempting to slow down their growth. He doesn't get that when he hurts China, he hurts our companies who sell in China.

The world economy is facing challenges, challenges we might be able to ride out. But Trump's actions are lowering our chances of riding it out. Hurting our farmers. Hurting our manufacturers. Hurting the people who did get exemptions. Hurting the people even more who didn't get exemptions. Trump is intentionally causing damage, without seeming to realize that suffering world populations will be poorer customers than well-off world populations.

And I'm fed up with people like you saying, "Well, that company was already facing challenges, so what did it matter if Trump increased the price of them doing business. If they couldn't survive Trump making it even more challenging for them, then that's their fault."

When do you suggest would be a good time to confront China?
 
I’d youre fed up then maybe you should make the effort to gather the facts before making accusations. Apple’s products were exempt from the tariffs and it predicted that it would have a decline in revenue precisely because of the reason I mentioned. The only story here is that it turned out to be larger than anticipated, but you can’t blame tariffs for that.

*sigh*

Trump is actively doing damage to our business's prospects abroad.

Every single business which says it's having a hard time, Trump and his deflectors point out that there was already something wrong with the business, so it's not Trump's fault that they fell off the cliff when they were already on the edge and he kicked them from behind.


Keep defending the indefensible. I know you will. Not Trump's fault at all that he's making our products more and more expensive and closing off world markets that we depended upon.

You don't have to sell me. You're 100% right. Not Trump's fault at all.
 
*sigh*

Trump is actively doing damage to our business's prospects abroad.

Every single business which says it's having a hard time, Trump and his deflectors point out that there was already something wrong with the business, so it's not Trump's fault that they fell off the cliff when they were already on the edge and he kicked them from behind.


Keep defending the indefensible. I know you will. Not Trump's fault at all that he's making our products more and more expensive and closing off world markets that we depended upon.

You don't have to sell me. You're 100% right. Not Trump's fault at all.

You aren’t listening. Why are you blaming tariffs for a decline in sales of a product exempt from said tariffs?
 
You aren’t listening. Why are you blaming tariffs for a decline in sales of a product exempt from said tariffs?

Tariffs are hurting China's economy. Trump is depending on that fact. He and you both don't know or are denying that this is going to hurt American companies.

Trump is playing a lose-lose game, and now we're all losing. So congratulations to him. And you can say it's not his fault all you want, but that's taking credit away from him for achieving his goal of causing extreme pain.


Oh, and bye. I'm very bored with people making excuses for the consequences of the damage Trump is intentionally causing.
 
World wide, the demand for expensive smart phones has declined. In China, local brands at lower prices have picked up significant market share. The political turmoil, protectionism, doesn't help. As Cook pointed out, it is less expensive to upgrade a battery instead of a phone.

Still much of the market failure is due to a panic, not actuality. Apple's guidance predicts a drop of 4% of iPhone revenues, but an increase of other revenues by 27%. Instead of $96bil in revenues for the December quarter, the company will realize $86bil in revenues. We should all have such troubles. :) Numbers that do no warrant the equity price drop.

Psychology of the market has dictated the panic. The same analysts who 3 months ago touted Apple as a sure win are now certain once again Apple is doomed. I'm putting my money where my mouth and buying more Apple equities

The market was over heated, over exuberant, and the up cycle lasted far too long. This was inevitable for one reason or another. The hedgers, the traders took a bath, and not just from Apple. This is healthy for the long run. The last time Apple behaved like this, the stock increased 75% within two years. Similarly for the rest of the market.

The company, like most American companies, is not sitting back on its laurels. It's r&d expenditures are massive, and as new products show (the watch, AirPods) more variety of products make the Beats go on when combined. As apps for the health industry increase and improve, their use with the watch and iOS devices also mean more sales, and build out of Apple's cloud business. Same with Apple music and whatever it does for its share of the video streaming business.The company is still operating on all cylinders, and the analysts don't know diddly.

Apple is the obvious example, but the rest of the marketplace with a few minor exceptions is the same.

Trump's antics may actually been a good thing, forcing a reevaluation and reestablishment of a base to grow from. We make money when we buy, not when we sell. This is the time to buy and accumulate. This is not said in defense of Trump, but about how the markets function. If it wasn't him, something else would have accomplished the same.

Take a good look at the markets. There is no shortage of buyers for most of the equities that have seen price drops.
 
In this case it has very little to do with Trumps tade wars. For Apple it is a good excuse to use to distract away from the internal rot.

Remember iPhone are made in China so tariffs don't apply.

No Apples problem is that their phones are too expensive relative to the direct competition who are producing as good if not better phones.

On top of that, Apple has never managed to gain the same cult following in China as in the US or elsewhere.

Plus Apples distribution system in China is poor. You have Xiaomi, Huawei, Oppo, ZTE and others stores everywhere and that is how the Chinese shop phones.


Sent from my Honor 8X using Tapatalk
 
The drop in Apples stock price has been dramatic

From over $1 trillion back in October, to $680 billion this morning. The P/E ratio on Apple is around 12 which is very reasonable. But if Apple starts to lose market share in the phone industry, it's major source of profits can be cut dramatically. The services it sells would be affected as well (tied to the IOS ecosystem)

The preference for apple products is still there, the issue to me is that this year they hit peak pricing, they’ve had a correction and if they can come back next year with more reasonably priced phones with any interesting features I think they’ll do well.

They’re still in danger of pricing themselves out of the market and allowing a competitor to undercut and destroy them but that competitor hasn’t reared its head yet.

People are just keeping their older iPhones rather than necessarily switching to a competitor.
 
I dont buy Apple products or their stock, so it doesnt affect me.

There's the rub. It used to be said "What's good for US Steel is good for America." Apple as one of out largest if not the largest company is an example, and it does rollover on you because it effects so many other companies, which in turn contribute to the psychology of the markets. That effects you regardless of imminent results. Even if you don't play the markets.

Apple has become a joint development between the US and China. Apple working with Foxcon, and the pace of China's industrial output is dropping. To think this is only an American issue if simplistic. Markets function in cycles. They do not keep rising indefinitely. We are seeing a pullback almost everywhere. That effects you.

Let's also not forget how much cash these companies, especially Apple, have accumulated. Despite stock buybacks and increased dividends, as an example, Apple is sitting on a huge cash stockpile. Enough cash to keep the company humming for decades. When we see this current quarterly statement, we will still see an enormous growth of cash reserves. The same with many other companies.
 
The preference for apple products is still there, the issue to me is that this year they hit peak pricing, they’ve had a correction and if they can come back next year with more reasonably priced phones with any interesting features I think they’ll do well.

They’re still in danger of pricing themselves out of the market and allowing a competitor to undercut and destroy them but that competitor hasn’t reared its head yet.

People are just keeping their older iPhones rather than necessarily switching to a competitor.
They hit peak pricing when the cheapest new iPhone started at 1000 dollars. Problem was that they increased the price and introduced a "cheap" iPhone that was still more expensive than the premium iPhone from 2 years ago.

Apple has totally screwed up their own pricing. There is no real good reason to go from the X to the XS and the XR is too expensive to be a cheap phone and its screen is rubbish compared to the X and XS. That is why the X actually out sold the newer models.

Add to that, the iPhone 8 and earlier have been banned in China and Germany and soon all of Europe due to patent violations.

In places like India and China Oppo, Honor, Huwauai and others have phones that do what iPhones do and are much cheaper...so why get an iPhone?

Sent from my Honor 8X using Tapatalk
 
If we cant fight Chinas unfair trade practices without hurting the global economy, when can we fight them? Never?

Serious question: If you were making more money prior to Trump's silly little trade wars, how unfair were China's trade practices? You would think that American companies would be doing better, not worse, with China put in it's place.

Also...hurting the global economy? I think you're actually helping it, by removing yourselves as competition. So at least there's that...

I feel like I stumbled into Opposite Day, or something.
 
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