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 Takes Action to Protect Users’ Privacy

“Privacy to us is a human right.”- Tim Cook, CEO of Apple

(Source: Flickr)

Apple’s core goal is to create excellent the best product possible while respecting the privacy of those who use their software. Privacy is a huge concern for Apple in a time in where it seems that our lives are public for all to see. Thus, Apple is taking a huge step forward to try and protect it’s valued customers from immoral data apps and law enforcement.

On June 12th, Apple updated its App Store policy to restrict all apps from harvesting the data of other apps and contacts that iPhone users have. This is direct attack on Facebook who collects data for marketing and acquisition opportunities through their VPN app, Onavo. This App Store update comes after Facebook was involved in the Cambridge Analytica scandal, where millions of users data was taken from Facebook unbeknownst to them.

(Source: Pixabay)

Last year, Apple took a lot of flack for not giving the FBI access to a terror suspect’s iPhone data. The news was so big that the President of the United States switched to an Android over Apple’s refusal. However, the FBI went to a third party and got the phone unlocked through them, a data breach that Apple found worrisome.

The company will now go forward with a brand new update which gives iOS devices that are prone to the hack a new software called “USB Restriction Mode”. This mode stops hackers by restricting data from being transferable after an iOS device has been locked for an hour.

Law enforcement are astonished by this update and ridicules Apple for it. They feel as if American citizen’s safety is in danger if they cannot access suspects personal data. To Apple, this isn’t just a law enforcement problem, but a problem for any criminal willing to bypass the iOS encryption. So, they are satisfied with this update as privacy is fundamental to them.

Apple’s stock price has decreased from June 12th to June 13th by .82% and volume increased by 26.83%. 

On June 13th, the S&P 500 was also down due to anticipation and the eventual exercise of the Fed hiking interest rates to 2% occurred

(Source: YCharts)

(Source YCharts)