Apple's warning lowers investor sentiment

  •   19/02/2020 - 10h10
  •   DEHOUI Lionel

The economic world is faced with several pieces of information concerning sales in the economic markets. Tuesday's news speaks clearly about the effect of Apple's warning on investors worldwide. We note that there are futures contracts on European indices, but there is also the closing of the markets in China, not to mention the price of Apple in Frankfurt, or the opening of the bond market in Europe.

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Apple's warning lowers investor sentiment
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The details

Clearly, the epidemic caused by Covid-19 (coronavirus) continues to exert its influence on the world economy and especially on the major investor players involved in sales. Thus, Apple announces that it is very unlikely that it will meet its previously set revenue targets for the first quarter of the new year 2020. The consequences of the epidemic are at the root of this unpleasant situation for investors. Their morale is at an all-time low.

As a result, a pullback is in sight for the European indices and the Tokyo Stock Exchange is stuck at the bottom. This economic situation of the Japanese stock market has been going on for the past two weeks. At the opening and after the giant Apple's warning about its profits, the main stock exchanges of the European Union are expected to fall. This is what investors are expecting on Tuesday, especially for the demand for its products.


The numbers

As for the CAC 40, index futures contracts suggest a fall of 0.64%, FCHI(Paris) of 0.8% for the Dax, FTSE (London) of 0.7% for the Stoxx 600 and GDAXI (Frankfurt) of 0.7% also for the FTSE 100. The slow resumption of production on the assembly lines of the Apple company in China (shut down due to the spread of the coronavirus) is the very basis of the warning for the period January-March.

Apple's multiple vendors were hit by the Asian markets, while the US group's share lost 5.9% at the first exchange rate in Frankfurt. At the same time, one of its direct competitors (Samsung Electronics 005930. KS) was experiencing a 2.76% decline in Seoul. Apple's statements call into question the concrete consequences of coronavirus on the economic revenues made by multinationals.


A statement not to be overlooked

According to comments by the Head of Investment Strategy, Norihiro Fujito of Mitsubishi UFJ Morgan Stanley Securities (Tokyo), "if Apple did not have the necessary resources, it would have been a very bad investment for the wouldn't be cheap, it wouldn't matter much, but since it's traded on higher historical highs, investors will surely be tempted to sell". Meanwhile, Stoxx set a record this Monday. The European Stoxx 600 index has therefore rebounded and proves that the contract could apply to many other assets.


The ZEW Index

In the present Chinese context, the announcement of the customs surcharge exemption measures for 696 additional products from the USA is relegated to the background. As for the countries on the European continent, the publication of the ZEW index in Germany should provide a more precise idea of the harmful effects of the epidemic. It was 10:00 GMT when the publication was talking about the impact of the coronavirus on the morale of major investors.