Risk drops after Coronavirus hits Apple Revenue Outlook
Sellers return as Apple warns may not meet its revenue forecast.
The reality of Coronavirus and a direct influence on industry took another step further today as Apple advised this morning that it might not meet its quarterly revenue forecast due to lower iPhone supply and demand due to the current coronavirus impacting Chinese manufacturing and local spending.
Apple manufactures most of its iPhones and products in China. The outbreak has caused production to stop temporarily and stores remained closed for longer after the lunar year break. Some stores have reopened this week but with reduced hours.
“This unexpected news confirms the worst fears of the Street that the virus outbreak has dramatically impacted iPhone supply from China/Foxconn with a demand ripple impact worldwide,” Wedbush Securities analysts Daniel Ives and Strecker Backe wrote in a note, adding that the magnitude of the impact is “clearly worse than feared.” – CNBC
“While this news is a tough pill to swallow for the bulls, Apple remains a company significantly exposed to this virus issue given the company’s massive supply and demand tentacles throughout China,” they added. – CNBC
Global impact continues, due to the severity and length of the coronavirus outbreak, it was really only a matter of time before the impact started to follow through. China is one of the worlds main manufactures and the world’s 2nd largest economy, this could be the start of a new trend affecting multiple industries.
The news affected risk markets during today’s Asian session, the JpN225 (nikkei) has dropped 1.16%. The Nikkei is also dealing with a Japanese GDP drop and recession fears. With rates currently below zero, the BOE continues to see a strong current to swim against. Chinese indexes are also in the red, the China A50 1.16% lower and the Hang Seng 1.38% lower.
Gold saw a boost from the news hitting a new weekly high of 1587.32. Oil retreated on the news currently around 0.50% lower. The AUD saw the sharpest losses on the risk majors down 0.31 to the USD and 0.44% to the JPY. The USDJPY was another targeted by sellers falling 0.19% to its session low.
Tonight U.S. markets come back online after observing Presidents Day.