Apple depreciates by almost R$ 1 tri after Chinese sanction – 09/07/2023 – Market

Shares of Apple Inc. continue to plunge on Thursday as China plans to expand its ban on the use of iPhones to government-backed agencies and state-owned enterprises. The technology trillionaire is on track to lose its market value by US$200 billion in just two days after Beijing’s announcement.

The shares of the company based in Cupertino (California) fell by 5.1%, which generates an accumulated drop in two days of 6.8%. Apple is the main stock traded on the largest US stock exchanges, which triggered a rush to sell assets triggered by problems in China.

The world’s second-largest economy has faced a slowdown amid a prolonged crisis in its property market. This scenario threatens demand for everything: from commodities to consumer electronics. The iPhone maker considers China to be its largest foreign market and global production base.

Adding to Apple’s woes are rising U.S. Treasury bond yields as bonds are sold off due to concerns that the Federal Reserve will have to step up its fight against inflation as the U.S. economy remains resilient.

The news has had a widespread effect on markets and led investors to sell everything from chips and technology capitalization bonds to Chinese stocks listed in the US.

“The Nasdaq industrial index is tanking as one bad apple ruins a bunch of technology stocks,” said Edward Moya, senior market analyst at OANDA. “Apple’s growth story depends heavily on China and if Beijing’s crackdown intensifies, it could pose a big problem for the group of other large-cap technology companies that depend on China.”

Meanwhile, the technology-focused Nasdaq 100 index was trading down about 1%, while the Philadelphia semiconductor index, which consists of several Apple suppliers, was down 2.5% on Thursday. fair.

coincidences

Bank of America Corp. analyst Wamsi Mohan notes that the “timing of the potential ban is interesting” given the recent launch of Huawei Technologies Co.’s high-quality, 5G-capable smartphone.

The teardown of the new device shows that Beijing appears to be making rapid progress in a nationwide effort to circumvent U.S. efforts to stem its advance, with Huawei’s Mate 60 Pro being powered by Semiconductor Manufacturing International Corp.’s 7nm chips, according to an analysis conducted by TechInsights for Bloomberg News.

If Beijing goes ahead with the ban, the unprecedented blockade could also affect several other U.S. technology companies that rely on sales and production in China. Apple suppliers on several continents were trading lower on Thursday as multiple reports confirmed China’s latest moves.

However, bullish analysts like Daniel Ives of Wedbush Securities believe the effect of an “iPhone ban is overblown” as it would affect fewer than 500,000 iPhones out of the roughly 45 million he expects to be sold in the country over the next 12 months. .

“Despite the loud noise, Apple has been making big share gains in China’s smartphone market,” Ives, who has an above-average rating on the stock, wrote in a note.

_{Text translated with the help of artificial intelligence}