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Why Apple’s Stock Drop Has the Dow Spooked

Say Contributor
Apple's stock woes continue this week, after analysts at Rosenblatt Securities downgraded their stock to a "sell." Apple’s stock prices dropped 2% on Monday, and the Dow Jones was not thrilled, dropping 100 points in response. Tough Year Apple has long been both one of the safest bets on the market. But this has just not been their year. At the start of 2019, CEO Tim Cook admitted that first-quarter earnings would be a projected $84 billion. That sounds great, but this was a downgrade from an initial $93 billion. This was the first time Apple decreased revenue expectations in 16 years. And Now Three analysts at Rosenblatt Securities now rate Apple's shares a "sell," and another 18 analysts have Apple as "hold” (kinda the same thing to many). But buck up, Tim: 23 analysts still think Apple is a "buy." What’s with the sluggish growth? China Doesn’t Like It Like most worldwide companies, Apple relies heavily on the Chinese market. Unfortunately, the Chinese just aren’t feeling the new iPhone XS all that much. While Apple’s unique iOS operating system is huge in America and Europe, in China they much prefer WeChat, which works on both IOS and Android phones, and is therefore available as a much cheaper alternative that still lets users do all the normal iStuff (bills, cabs, e-mails etc.). iFatigue Since the debut of the iPhone in 2007, Apple could rely on a set of consumers who would eagerly purchase the latest model whenever it hit the market. But as New York argued last year, at this point, most people view their iPhone as akin to household appliances. No one gets psyched when a new microwave model hits the market, right? You’d rather just ride your current one out until it breaks. Same for the iPhone. It doesn’t help that the current $1,000 plus price point for the new iPhone, is just a littie much for a lot of people these days. Why is everyone freaking out? Well, Apple is so huge that whatever affects it has ripples for the entire economy. The S&P; dropped .5% yesterday as well. To give you some perspective, Apple has lost $452 billion in market capitalization since Oct. 3. of last year, its shares falling more than 39% percent. As CNBC pointed out, Apple has basically lost revenue bigger than some companies total worth. Put it another way: Apple has lost a Facebook and a McDonald’s three times over. -Michael Tedder Photo: Joshua Roberts/REUTERS

Apple's stock woes continue this week, after analysts at Rosenblatt Securities downgraded their stock to a "sell." Apple’s stock prices dropped 2% on Monday, and the Dow Jones was not thrilled, dropping 100 points in response. Tough Year Apple has long been both one of the safest bets on the market. But this has just not been their year. At the start of 2019, CEO Tim Cook admitted that first-quarter earnings would be a projected $84 billion. That sounds great, but this was a downgrade from an initial $93 billion. This was the first time Apple decreased revenue expectations in 16 years. And Now Three analysts at Rosenblatt Securities now rate Apple's shares a "sell," and another 18 analysts have Apple as "hold” (kinda the same thing to many). But buck up, Tim: 23 analysts still think Apple is a "buy." What’s with the sluggish growth? China Doesn’t Like It Like most worldwide companies, Apple relies heavily on the Chinese market. Unfortunately, the Chinese just aren’t feeling the new iPhone XS all that much. While Apple’s unique iOS operating system is huge in America and Europe, in China they much prefer WeChat, which works on both IOS and Android phones, and is therefore available as a much cheaper alternative that still lets users do all the normal iStuff (bills, cabs, e-mails etc.). iFatigue Since the debut of the iPhone in 2007, Apple could rely on a set of consumers who would eagerly purchase the latest model whenever it hit the market. But as New York argued last year, at this point, most people view their iPhone as akin to household appliances. No one gets psyched when a new microwave model hits the market, right? You’d rather just ride your current one out until it breaks. Same for the iPhone. It doesn’t help that the current $1,000 plus price point for the new iPhone, is just a littie much for a lot of people these days. Why is everyone freaking out? Well, Apple is so huge that whatever affects it has ripples for the entire economy. The S&P dropped .5% yesterday as well. To give you some perspective, Apple has lost $452 billion in market capitalization since Oct. 3. of last year, its shares falling more than 39% percent. As CNBC pointed out, Apple has basically lost revenue bigger than some companies total worth. Put it another way: Apple has lost a Facebook and a McDonald’s three times over. -Michael Tedder Photo: Joshua Roberts/REUTERS