Every year in early autumn Apple holds its event where it presents new iPhones, Apple Watches, and iPads. This year wasn’t an exclusion. But yesterday’s presentation didn’t result in Apple stock growth, and here’s why.
What is pulling the stocks down?
The earnings season has come to an end, but that does not stop the news, which moves the stock market. Indeed, coronavirus fears continue to determine the risk sentiment in the markets. The outcome of the quarantine measures is already visible from the recent researches and the fresh announcement by Apple. Below we outlined the main disappointments for the stock market right now.
Disappointment number one: Apple
The big news from Apple seemed to affect everything. The European stock market fell lower with the gap down of DAX 30, the S&P 500 is targeting the levels on the downside, too. The safe-haven currency pairs got stronger and the oil prices fell. The risk trading is held on the pause and soon we will see how the American stocks reacted to that report as well. What is so special about the revenue update by Apple that drives the markets crazy? Of course, it is the figures. Before the outbreak of coronavirus, Apple set the target revenue in the range between $63 billion and $67 billion. Now, according to the guidance by the gadget producer, the company does not expect to meet its revenue target due to the slowdown and lower smartphone demand. The thing is, Apple has great exposure to the Chinese market and has production facilities there. That is why it is not a surprise that the long-lasting Chinese New year “holidays” affect the company’s performance. At the same time, the sales outside China have been quite strong, according to the report.
After the American market’s opening, the stock of Apple gapped down to the $309 support but immediately regained strength towards the $325 level.
Disappointment number two: Walmart
The US retail corporation showed weaker earnings data this quarter. EPS missed estimates with $1.38 (vs. the expected $1.43) and the revenue also disappointed the markets with $141.67 billion (vs. $142.4 billion forecast).
At the moment, on the daily chart of Walmart, the key levels for bears lie at $117 and $115.7, while the upside momentum may be limited by the $119.4 and $120.7 levels.
Disappointment number three: General Motors
The company is reportedly leaving the markets of Australia, New Zealand, and Thailand in order to focus on more productive markets. Among GM’s plans is the selling of the Rayong factory in Thailand and withdraw the Chevrolet brand from there by the end of 2021.
The price of GM opened much lower on the daily chart but managed to recover towards the $35 level.
Richard Branson offloaded nearly 10 million shares, which equals about 4% of the Virgin Galactic stock, leaving him with an 18% stake.
Today at 00:00 GMT+3 SPCE will present the second quarter 2021 financial results. We will get to know everything about the company's financial condition and plans.
The US Markit will publish Flash Manufacturing and Flash Services PMIs (purchasing managers' indices) on June 23 at 16:45 GMT+3.
The Fed Chair Jerome Powell will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee on June 22-23 at 17:00 GMT+3.
Canada will publish Retail Sales and Core Retail Sales on June 21 at 15:30 GMT+3.