It Is All About FOMC Minutes | Apple Reassured Investors About Earning


  • US is considering more than doubling its planned tariffs
  • Apple lifted optimism despite the fact it missed the street estimate




The trump administration has decided to use another aggressive tactic to bring China on the negotiating table. US is considering more than doubling its planned tariffs on $200 billion in Chinese imports,  completely crazy idea. You can not make China to work with you under your conditions. Putting a gun to the head approach does not work here. Therefore, the trade tensions are going to remain a major focus during this month as the US would continue to work with China. Although, there is no certainty if any of these efforts/threats would make the US and China trade relations any stronger or if this would push them further away.
 
In terms of economic data, it is all about the upcoming FOMC statement and the Fed funds rate. No one is expecting the Fed to change the rate today but the Fed's view about the economic health of the country would determine the future path of the rate hike. Donald Trump has already made his position clear to the person in charge which he put in place. Donald does not want the interest rates to move any higher this year. But before we get the FOMC statement, the focus will also be on the ISM manufacturing PMI number which is expected to some a little soft. Thanks to the ongoing discussion on trade war and tariffs. A number below the expected number of 59.4would cause a pullback for the dollar index.  

As for earnings, if there is any company which can change sentiment about the tech stock, it is Apple. The tech giant emboldened faith in earnings and gave investors hope that the FANGs have much stronger components. In other words, Apple lifted optimism despite the fact it missed the street estimate in terms of its iPhone sales. Apple sold 41.3MM iPhones missing the estimates of 41.6MM. The sales of iPad and Macs have been disappointing but the company beat the bottom and top line figures; Q3 EPS of $2.34, vs Exp. $2.18 on revenue of $53.3BN vs Exp. of $52.4BN.  It maintained investors' faith in Apple by providing revenue guidance for Q4 above analyst estimates. The company made it clear for investors that it has the ability to fight all the wars at the same time.
 
Average iPhone price remained above the $700 mark for the third consecutive quarter. This tells us that Apple is struggling to price down and this is when Chinese mobile companies are opposing a serious threat to Apple.
 
Having said this, if you look at the apple’s regional sales on y/y percentage change basis, if becomes evidently clear that Apple is still in a process of securing a higher share of the market. It is also important to say that Apple’s share in Greater China market on y/y market has lost its mojo.
 
When it comes Apple arrives growth, the company has made a little progress on this. But the company’s revenue has increased. America’s remain the strongest market for Apple in terms of sales and on y/y basis, the company has improved its number by 20.4%. Greater emphasis has been on China and on y/y basis, the company has improved its sales performance in the region by 19.3%.
 
As for the global economy and trade war, the trump administration has decided to use another aggressive tactic to bring China on the negotiating table. US is considering more than doubling its planned tariffs on $200 billion in Chinese imports,  completely crazy idea. You can not make China to work with you under your conditions. Putting a gun to the head approach does not work here. Therefore, the trade tensions are going to remain a major focus during this month as the US would continue to work with China. Although, there is no certainty if any of these efforts/threats would make the US and China trade relations any stronger or if this would push them further away.
 
In terms of economic data, it is all about the upcoming FOMC statement and the Fed funds rate. No one is expecting the Fed to change the rate today but the Fed's view about the economic health of the country would determine the future path of the rate hike. Donald Trump has already made his position clear to the person in charge which he put in place. Donald does not want the interest rates to move any higher this year. But before we get the FOMC statement, the focus will also be on the ISM manufacturing PMI number which is expected to some a little soft. Thanks to the ongoing discussion on trade war and tariffs. A number below the expected number of 59.4would cause a pullback for the dollar index.  
 

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