Apple shares decline as HSBC cuts price target over iPhone tariff concerns

“Apple shares were down 2.5% in pre-market Monday after HSBC cut the tech giant’s price target over fears of its exposure to the trade war between the U.S. and China,” Elliot Smith reports for CNBC.

“HSBC Global Co-Head of Consumer and Retail Research Erwan Rambourg decreased Apple’s price target to $174 a share from $180, retaining a ‘reduce’ rating amid renewed Chinese growth risks and tariffs,” Smith reports. “Apple’s fall Monday was accentuated by a global sell-off in tech shares after Google suspended some business activity with Chinese telecoms giant Huawei over the weekend.”

“The analyst note suggested that recent tariff hikes on imports of Chinese goods into the U.S., and the subsequent retaliation from Beijing, could either force Apple to increase prices, driving down demand given consumer sentiment about recent iPhone launches being ‘too pricey,’ or take a hit on margins,” Smith reports. “‘Second, there is a risk that in the Chinese market, consumers accelerate the shift to smartphone substitutes notably by going to local brands with comparable functionality (Huawei, Xiaomi),’ Rambourg added.”

Read more in the full article here.

MacDailyNews Take: This too shall pass.

SEE ALSO:
How the U.S.-China trade war could hike Apple iPhone prices – May 19, 2019
Apple’s tariff tradeoff: Raise prices, suffer margin hit, or build more products outside of China – May 17, 2019
Nomura Instinet cuts estimates on U.S.-China trade skirmish – May 17, 2019
Trump administration blacklists Huawei putting Apple at risk of retaliation from China – May 16, 2019
The media is lying to you about President Trump’s China tariffs – May 15, 2019
Analyst: Apple investors ‘overreacting’ to U.S.-China trade war and Supreme Court App Store ruling – May 14, 2019
Apple, Deere & Co, retail in focus as U.S. releases fresh tariff list – May 14, 2019
Gene Munster: Apple likely to be spared from China tariffs – May 10, 2019
Apple shares drop 7% this week on fears China trade turmoil threatens iPhone sales – May 10, 2019
Apple’s iOS 13 rumored to drop support for iPhone 6, iPhone SE and iPhone 5s – May 10, 2019
Apple not yet hurt by China tariffs, likely to simply absorb the added cost – May 10, 2019
Apple temporarily escapes new tariffs as U.S.-China trade war escalates – May 10, 2019
Dow futures fall after President Trump tweets ‘absolutely no need to rush’ on China trade deal – May 10, 2019
China overplayed its hand with U.S. President Trump on trade, and it could cost them dearly – May 9, 2019
Apple CEO Tim Cook optimistic about U.S.-China trade talks – February 12, 2019
President Trump says U.S. doing well in trade negotiations with China – January 23, 2019
China’s 2018 growth slows to 28-year low, more stimulus seen – January 22, 2019
Apple CEO Tim Cook: I’m very optimistic about U.S.-China trade talks – January 8, 2019
Advisor to President Trump: Apple’s sales should pick up when U.S.-China strike trade deal – January 3, 2019

5 Comments

  1. Stock Market 101: Wall Street doesn’t control, decide or “set” the price of a stock. Nor does it “reflect” the state of the economy, let alone the state of any company represented.
    For example, the success of Apple (or lack thereof) has no direct effect on the price of Apple’s stock. Rather, when traders are (in general) more interested in selling it than buying it, the price of a stock declines. The opposite is also true.
    If you “Play” the stock market (trade) you quickly discover the only way to make money on a rising stock is to be among the first to buy it (when it is still low). And the only way to avoid losing money on a declining stock is to be among the first to sell it (when it is still high). The net result, folks, is traders don’t watch the company behind the stock. They are watching each other. If a few start selling a stock, the rest rush to sell it, too. If they hear some news (or some analyst’s comments) that they think will cause other traders to react, they will try to be among the first to so react. Thus they become a self-fulfilling prophecy.
    Investors, on the other hand, are interested in the company. They buy and hold for the long term. For them, it’s a savings account with (hopefully) a better return. But because of this, Investors don’t influence price changes in any way.
    Wall Street is not smart, stupid or clueless. People who cry, “They just don’t understand Apple,” don’t understand the market. It’s a mob-mentality, pure & simple. They don’t care about you, me or Apple. They only care about each other and any “skill” they may have is simply the ability to predict what other traders might do before they do it.

    In other words, “traders” are like sheep… If a few suddenly start to run, they all run and in the same direction. Only afterward will analysts attempt to figure out why.
    What’s the solution for Apple? Minimize their reliance/exposure to traders. So, you begin share buy-backs and bond issues – with an eye toward reducing your risk (from traders) or perhaps one day eliminating it! (Get out of the stock market and go private. All they’d really need is lots of money to fund themselves! Hmmm.)
    I’ll get off my soap-box, now.

    1. Sure, that’s why Microsoft and Amazon are leaving Apple in the dust in terms of company value. Traders are following the winners, not the losers. There certainly is less negative news about Microsoft and Amazon than about Apple. It seems as though Chicken Little is always looking up at Apple and declaring “the sky is falling.” I see so much negative news about Apple, I think it would be more than enough to make traders run for their lives. Just remember, Apple also has a relatively low institutional investor percentage so even those longer-term investors think Apple isn’t worth their time.

      Thank Tim Cook for putting so much of Apple’s revenue on the firing line of Chinese consumer iPhone sales. Now the Chinese consumers want no part of Apple or the iPhone.

  2. The stock market is not the economy.

    That being said, the consumer is getting doubly screwed by the lies of traitorous corporations that have outsourced everything including the family jewels to China for decades — and now a traitorous US administration that claimed it would reduce the trade imbalance (it’s worse now), pump up the stock market (the corporate tax giveaway sugar high has faded), and so on hasn’t closed a deal yet.

    If America is greater by creating enemies of everything around it, well you picked the right POTUS to do that. Sorry about your retirement savings and your small businesses. Remember, trade wars are easy to win if you ignore the pawns in the game.

  3. Markets go up and markets go down, true, but does anyone care to defend Trump’s idiotic decision to start a trade war with China?—the world’s second-largest economy? The nation that makes massive amounts of our products and then exports them back to the United States (where, thanks to Trump, a tariff is now placed on them?). He didn’t think that one through too clearly, did he?

    For all his bluster and bravado, his knowledge of economics, both macro and micro is nil: his macro ignorance being played out in the market’s response to his tariffs (AAPL down 35 in the past three weeks). He fails to understand the simple premise that in a trade war increased prices are simply passed on to the consumer, in case all of us. Either that or companies move their factories and facilities offshore meaning lost American jobs. As for His own companies, he’s faced a slew of personal bankruptcies as company after company goes under… and his casinos? How do you lose money on a casino? Well, ask Trump. Trump is used to “doing business” by lying and cheating and bullying, tactics that will not work with China, so though China is not exactly honest in its patent infringement, there are diplomatic methods of solving disputes, and Trump is just a wee-bit hypocritical when it comes to calling them out on their business practices.

    And now he wants to go to war with Iran? Iran is no third world nation. He says going to war with Iran will “be the end of Iran”? Really, he had better go online and take a look at Iran’s military capabilities before uttering such foolish facile, ignorant, saber-rattling statements. he tore up a perfectly good agreement simply because it was negotiated by Obama to wade into a morass of his own devising. We lost a war to Vietnam, which was legitimately a third -world nation at the time. Good luck handling the Iran of 2019:
    https://www.globalfirepower.com/country-military-strength-detail.asp?country_id=iran

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