Published: Sat, January 05, 2019
Money | By Ethel Goodwin

Stock Market Crash Continues as Apple Stock Plunges

Stock Market Crash Continues as Apple Stock Plunges

The rare revenue warning - the company's first in almost 12 years - sent shockwaves through global financial markets with chipmakers that supply to Apple being the hardest hit. But he said then that he "would not put China in that category" of countries with troubled growth.

The company this week issued a dire warning to investors about its business, announcing that it would miss its sales target for the last quarter of 2018 by at least $5 billion.

"For a while now, there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK", said Neil Wilson, chief markets analyst at Markets.com. The tech giant is now anticipating revenue of $84 billion Dollars for the final three months of 2018, down five percent from the same period in 2017 and $9 billion lower than Apple's original highest forecast for the quarter. One of the key elements that Apple blamed for this sudden drop in revenue was the lack of interest in upgraded iPhone models and the Chinese economy. Stocks went into a steep slide Thursday after Apple sent a shudder through Wall Street with word that iPhone sales in China are falling.

China is looking to push ahead with its rollout of a faster 5G network, with a pre-commercial phase this year and a commercial network in 2020. There's no doubt Canada will feel the effects.

This represents the biggest stock market dive since 5 December when U.S. stocks suffered a dramatic decline; the Dow Jones fell 800 points back then due to renewed concerns over Washington's trade dispute with China and indications of a possible looming economic recession. The S&P 500 technology companies had their worst day since August 2011.

Cook told CNBC that trade tensions between the two economic heavyweights are putting "additional pressure on their economy".

Archibald said the weaker outlook for China and weak USA manufacturing numbers released Thursday will put pressure on the presidents of the world's two largest economies to make a deal faster to stop some of the economic uncertainty. And market data has shown that the contraction in Greater China's smartphone market has been particularly sharp.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the USA, loses strength.

Those companies are increasingly reliant on Chinese sales.

The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September a year ago to seize the number two spot behind industry leader Samsung, according to the research firm International Data Corp.

"This year has the potential to be a tough year for western brands", said Benjamin Cavender, a Shanghai-based analyst at consultant China Market Research Group.

Battered by negative Apple news, USA stock indices dropped sharply on Thursday morning.

A weak report Thursday on USA manufacturing also weighed on the market.

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