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Apple’s Glum News About China Sales Sends Global Stocks Lower Apple’s Glum News About China Sales Sends Stocks Lower
(about 3 hours later)
HONG KONG — Apple has given global investors another reason to worry, and they reacted on Thursday with a cautious retreat. HONG KONG — Apple gave stock investors another reason to worry about the world’s second-largest economy, and they reacted on Thursday with a cautious retreat.
Markets across Asia and Europe fell slightly but broadly. Investors shed technology stocks in particular after Apple’s announcement on Wednesday that iPhone sales in China had been disappointing. The company warned shareholders of a slowdown in sales in China, as consumers there have pulled back amid “a climate of mounting uncertainty.” Overall sales in the first quarter, Apple said, would be lower as a result. Apple shares fell as much as 8 percent in premarket trading.
Investors have heard a steady drumbeat of disappointing news about the Chinese economy. Reports on manufacturing, exports, retail sales and industrial production have all shown evidence of weakness.
But Apple’s warning was among the clearest indications yet of how the slowdown in China, caused in part by a trade war with the United States, can impact global businesses.
Still, by recent standards, the decline in stock markets on Thursday was not severe. Shares in Asia and Europe fell slightly but broadly. Investors shed technology stocks in particular.
Investors who try to predict Wall Street’s moves through futures contracts signaled that American markets would also open lower Thursday morning.Investors who try to predict Wall Street’s moves through futures contracts signaled that American markets would also open lower Thursday morning.
By midmorning in Europe, the Euro Stoxx 600 had slipped 0.8 percent, dragged down by the technology sector. The CAC 40 in France and the Dax in Germany both slid about 1 percent. London’s FTSE 100 edged down about 0.4 percent. Apple said on Wednesday that it was lowering revenue expectations because of weak sales in Greater China — an area that includes mainland China, Hong Kong and Taiwan — for the quarter that ended on Saturday.
Apple said on Wednesday that it was lowering revenue expectations because of weak sales in Greater China — an area that includes mainland China, Hong Kong and Taiwan — for the quarter that ended on Saturday. The news added to other data showing China’s growth is slowing from big debt, ebbing consumer and business confidence, weaker property and stock markets, and the burgeoning trade war with the United States. The disclosure added to investors’ worries, which include rising interest rates in the United States and turmoil in Washington, something that Timothy D. Cook, Apple’s chief executive, mentioned in a letter to investors.
The Apple disclosure adds to investors’ worries, which include rising interest rates in the United States and turmoil in Washington, something that Tim Cook, Apple’s chief executive, mentioned in a letter to investors.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China,” Mr. Cook wrote. “We believe the economic environment in China has been further impacted by rising trade tensions with the United States.”“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China,” Mr. Cook wrote. “We believe the economic environment in China has been further impacted by rising trade tensions with the United States.”
The tech company had already been giving some investors pause, especially over the future of the iPhone, a signature product that helped Apple to become the first public company to reach a market capitalization of $1 trillion. After years of dramatic growth, iPhone sales have been sluggish for three years. Apple has maintained revenue growth by charging more for each device. The tech company had already been giving some investors pause, especially over the future of the iPhone, a signature product that helped Apple to become the first public company to reach a market capitalization of $1 trillion in August. After years of dramatic growth, iPhone sales have been sluggish for three years. Apple has maintained revenue growth by charging more for each device.
But many investors and analysts see growing evidence that iPhone sales might soon be declining rather than sluggish. But many investors and analysts see growing evidence that iPhone sales might soon be declining rather than slowing.
Tech-heavy indexes led the losses in Asia, where many of Apple’s suppliers are based. South Korea’s Kosdaq fell 1.9 percent, while Taiwan’s Taiex fell 0.7 percent. Markets in Japan, another major home for Apple suppliers, were closed for a holiday.Tech-heavy indexes led the losses in Asia, where many of Apple’s suppliers are based. South Korea’s Kosdaq fell 1.9 percent, while Taiwan’s Taiex fell 0.7 percent. Markets in Japan, another major home for Apple suppliers, were closed for a holiday.
Other markets were more moderate.Other markets were more moderate.
In China, the Shanghai Composite Index was flat, and Hong Kong’s Hang Seng Index fell 0.3 percent.In China, the Shanghai Composite Index was flat, and Hong Kong’s Hang Seng Index fell 0.3 percent.