Wall Street shares tumble after Apple warning

Mobile phones

The rare revenue warnings from Apple suggested weaker-than-anticipated sales of iPhones and other gadgetry, in part because of trade frictions between Washington and Beijing.

Like at other consumer goods companies, the festive season is typically Apple's strongest quarter, but revenues of $84 billion would mark an nearly five percent fall from the same period last year and represent the firm's first year-on-year quarterly decline since 2016.

Both of these numbers may sound positive; however, Cook's original estimate from about 60 days ago now was that Apple could earn as much as $93 billion in the quarter. This represented the worst trading day for the company since 2013.

The warning, which came after trading in NY closed on Wednesday, looked likely to rattle already-volatile stock markets when they reopen on Thursday - with stock index futures pointing to Wall Street falls. China's Caixin Services PMI, a survey of service industry purchasing managers, had a reading of 53.9 in December, a six-month high. Our results in China include a new record for Services revenue, and our installed base of devices grew over the past year. "To me, it's more clues about what's going on with the global economy".

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The weakening will also likely slow the Federal Reserve's interest rate hikes, which will weaken the USA dollar. "The more data points we get, the clearer we see the extent of the global slowdown".

Apple shares traded as low as 142.81 dollars apiece, or almost 10 percent lower on Thursday, registering a 52-week low. But that was when consumers commonly purchased a phone every two years, a cycle that has elongated and might prompt buyers to want a more "future proof" device, said Glenn Lurie, CEO of Synchronoss Technologies and the former head of AT&T's wireless unit.

Lately, Apple has been offering a trade-in deal for the $749 iPhone XR that will cut the price as low as $449. "They're definitely having difficulties in China but we've seen this movie before and they tend to have hard quarters and recover and come back from that".

Apple's biggest competitors are already cashing in, but the iPhone has barely made a dent. Chinese smartphone manufacturer Huawei enjoys a 24.6 percent share.

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Step back from the gyrations of the moment, and there's an emerging strategy for Apple: Sell fewer iPhones and assorted devices such as Macs and iWatches at a higher price than mass-market rivals, and then flood those millions of users-who have more than average disposable income because they were able to afford those devices in the first place-with apps and content that they will pay for.

The February gold contract was up US$10.70 at US$1,294.80 an ounce and the March copper contract was down 5.5 cents at US$2.57 a pound. "That's what we're seeing now", said Jack Ablin, chief investment officer of Cresset Wealth Advisors. The Nasdaq fell 91 points, or 1.3 percent, to 6,575.

Apple and the White House didn't immediately respond to requests for comment.

"China's economy is definitely slowing quite a bit across a bunch of sectors, and this slowing momentum is likely to continue for another couple of months at least", said Arthur Kroeber, the founder of Gavekal Dragonomics, a research firm in Beijing.

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