Stocks bounce back on U.S.-China hopes; eyes on U.S

Pedestrians walk past an Apple Inc. store in San Francisco California U.S. on Thursday

Like at other consumer goods companies, the festive season is typically Apple's strongest quarter, but revenues of $84 billion would mark an nearly five percent fall from the same period last year and represent the firm's first year-on-year quarterly decline since 2016.

Bhansali has argued that consumers are no longer seeing the value for new models of Apple products, like the iPhone XS and MAX, which were more expensive than the iPhoneX, which she says itself was a disappointment.

This piles on to existing anxiety of a slowdown in global growth, Apple can be used as a proxy to China's growth.

Analysts see iPhone's high price point and lack of major updates as the major reasons for the Chinese market's lukewarm reaction to its new iPhone releases.

Apple surprised Wall Street on Wednesday afternoon after the market closed by issuing revised guidance for its fourth quarter in a letter from CEO Tim Cook to investors.

During the first three quarters of the year, Huawei sold 145.5 million phones, versus 140.4 for Apple.

Apple originally forecast revenue of between $89 billion and $93 billion. In August it became the first publicly traded company to be valued at $1tn. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years. With Apple suddenly launching several new products in the quarter-including iPhones, Apple Watches, and Macs-it experienced "supply constraints" that would "gate" (slow) sales of "certain products" during the quarter.

In November, Cook cited slowing growth in emerging markets such as Brazil, India and Russian Federation for a lower-than-anticipated sales estimates for the company's fiscal first quarter.

Analysts also highlighted that Apple was vulnerable to the effects of the US-China trade spat, in part due to risk that the tensions could cause Chinese buyers to sour towards US brands.

The Labor Department said hiring ramped up in December, which could allay fears about an economic slowdown in the U.S. Those worries, along with a weak revenue forecast from Apple, contributed to steep losses Thursday.

The drop in the index is another indication that slower growth in China and Europe is also hurting the USA economy.

But Mr Cook said "all is not lost" and predicts a "bright future" for Apple's business.

The economy created 2.6 million jobs past year compared to 2.2 million in 2017. The investigation comes after Apple lowered its earnings guidance for its first fiscal quarter of 2019, in which Apple CEO Tim Cook said he expects the company to end the quarter with $84 billion in revenue.

But some investors were heartened by Apple's plans on using its cash pile.

"We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices", said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners.

In his letter, Cook said Apple has $130 billion in net cash and that it intends to continue its efforts to reduce that cash balance to net zero, which the company has so far accomplished through dividend increases and share buybacks.



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