Apple Stock News: Apple Gearing Up for Trade War

On last week’s Apple Stock News, antitrust probes by the government threatened Apple’s stocks. Other tech giants such as Alphabet, Amazon and Facebook were not spared.

Such threats resulted in Apple stocks plunging in May but it has since mostly recovered. However, should news of antitrust probes start spreading again, Apple stock is likely to fall. Apple bears will be on the lookout for any bad news.

This week, the focus is on Apple’s decision to shift production out of China, interest rate cuts and low iPhone sales.

Apple Preparing for Battle

Source: Foxconn

Trade war tariffs placed on $300 billion worth of Chinese goods would drive prices of Apple’s best selling products up. This would render them less attractive to customers, potentially causing them to turn to Apple’s competitors.

For this reason, Apple has asked Foxconn to shift 15 to 30% of its production out of China to Southeast Asia.

Hon Hai Precision Industry, also known as Foxconn Technology Group, is Apple’s largest supplier.

This Taiwanese contractor currently makes most of its smartphones in mainland China. Escalating trade wars have forced Apple to reevaluate having so much production in China.  

“Twenty-five percent of our production capacity is outside of China and we can help Apple respond to its needs in the U.S. market.”

Foxconn’s board nominee and semiconductor division chief, Young Liu

Interest Rate Price Potential Drop

Source: XinHua/Zuma Press

Federal Reserve Chair, Jerome Powell, said that the central bank is willing to take monetary policy measures to ensure the US economy’s continued expansion. It raised investor’s hope of either a cut in interest rates or a rate cut.

However, their hopes were crushed. On 19 June 2019, a divided Federal Reserve indicated formally that no cuts are coming in 2019. This decision could drive tech companies stocks like Apple lower.

Despite the news, there is a possibility that policy loosening could happen before the end of the year.

“Many participants now see the case for somewhat more accommodative policy has strengthened.”

Jerome Powell, Federal Reserve Chair

Should the Feds carry though with their decision, it will drive tech stocks up significantly.

iPhone Demand in Decline Spelling Trouble for Apple Stock

Source: Apple

Revenue from iPhone sales plunged 17% to just over $31 billion in the last quarter. As a result, waning iPhone demands are keeping investors on their toes.

Furthermore, competition from China’s smartphone brands like Huawei, pressure on lowering selling prices and slower upgrade cycles all contribute to the slowing demand.

Huawei, Apple’s neck to neck competitor, saw sales climb 39% during that same quarter. The Chinese tech giant continues to gain considerable market share in China, whilst Apple loses its footing. US ban on Huawei have fueled the Chinese nationalistic pride. Growing support for their home-grown brand, Huawei, have sent Chinese citizens dumping Apple for Huawei.

Apple Stock News: Apple Backs Foxconn to Buy Chip Business

Apple Stock News

For the latest Apple Stock News, AAPL closed at $153.93 on Monday, June 5th, 2017. It had a loss of 0.98% from its previous close of $155.45 per share.

Apple and Amazon are reportedly teaming up with Foxconn in its bid for Toshiba’s semiconductor business, according to Foxconn Chairman Terry Gou. This unit is the world’ second-largest NAND chip maker. Specifically, Foxconn’s bid for the business has a valuation of $18.2 billion. Foxconn is a multinational electronics contract manufacturing company with its headquarters in Taiwan.

Apple and Amazon have provided financial backing for the bid, though whether it was in the form of a direct investment in the business or financing for the deal is undisclosed. In particular, Foxconn is a major supplier to Apple. For instance, the company provides electronics components and device parts Apple products such as the iPhone. Moreover, Toshiba’s NAND flash memory chip business produces chips suitable for smartphones and cloud computing data centers. This aspect can explain Apple’s interest in backing Foxconn’s bid.

If the deal goes through, this can be an opportunity for Apple’s smartphone and cloud computing businesses. Foxconn’s chairman is reportedly very confident about securing the deal. However, there may also be political complications due to Foxconn’s ties to China, which may not be favorable in the eyes of Japanese regulators. On a positive note, with US technology giants, Apple and Amazon as backers of the deal, their presence may move the Japanese government to reconsider interference.

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Apple Stock News: AAPL Working Together with President Trump

Apple Stock News

For the latest Apple Stock News, AAPL closed at $120.08 on Monday, January 23, 2017 with a 0.07% gain, or $0.08 from its previous close of $120.00 per share.

Apple Stock News

(Source: https://goo.gl/F16dQF)

Apple is looking into an investment in the United States after President Trump’s message, “Buy American, Sell American,” is continuously emphasized. Apple Inc. CEO, Tim Cook, continued to show interest after meeting with the President, in which they discussed jobs and incentives. Included in their offer is lower corporate taxes and a discount for repatriation from overseas.

If Apple were to follow through on the plans, they would invest roughly $7 billion with their supplier Foxconn Technology Group to build a liquid crystal display (LCD) manufacturing plant in the United States. The Taiwanese manufacturer, Foxconn, is the biggest contract maker of electronics whose most popular customer is Apple, contributing to 50% of their sales. According to Nikkei Asian Review, Foxconn CEO, Terry Gou, has considered moving production to the U.S. due to improvements in information technology and productivity, and lower energy costs in the states. The panel display facility is expected to create up to 50,000 jobs for Americans which is likely to please President Trump. And to Apple’s benefit, the plant would allow them to update their apple products, including their Macs, iPads, and iMac desktops. The plant could also be forward thinking from Apple to build the next generation of smartphone screens. The United States is the second largest T.V. market, yet has no display factories, posing a huge opportunity for the technology duo.

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