19.09 - We have an answer from China
Today is marked by the failing performance from the Apple shares as well as an answer to the newly appointed American tariffs from China.
As was predicted China didn’t make us all wait for the answer, concerning new package of American tariffs. Moreover, the Chinese went a bit further and subjected 3 times more American goods to penalties than the United States which added up to $60 billion worth of goods. All of the recent actions from both sides indicate the deepening of trade war and our stepping further away from some kind of a positive decision on tensions.
Earlier in the trade conflict this strategy hasn’t been executed yet – a tit-for-tat strategy is new to the table. And it is not simply eye for an eye situation. As we can see China is growing the insults by three times. And knowing that the United States have $200 billion worth of tariffs more we wouldn’t be as surprised to see these numbers being brought to life.
And having been in friendly relations with United States for a long tome the Chinese knew exactly where to hit – liquefied gas, aircrafts and food productions. Goods out of these branches of industry are going to be subjected to the tariffs. Which means that we have to pull out of that trading as fast as possible.
Some of the branches of American and Chinese production are about to go way down. And in practical sense it is better for us to pull out of these trades while the prices still allow us to see some kind of profits. Right now our selloff can hardly do as much damage to the trading as it would have dome a mere two weeks ago. The damage that was done by the countries themselves was far too greater at this point.
Slaps are not going to stop, as we feel. There is nothing that can prevent new tariffs from being imposed on China from American side. And as we can see today, Chinese are not going to leave the situation unanswered. Plus, the fact that the Chinese refused to sit to the negotiations table in case tariffs were going to be imposed also adds to our theory.
All and all we can say that trading with the companies producing goods which were subject for penalties is going to be nether pleasurable nor stable so it is better to get off the ship before it sinks completely.
It has been a week since the presentation of the three new models of iPhones took place in California. And it is time for us to review whether the new models were really able to save the stock of one and only trillion-dollar business.
Why are we so worried about the shares at this time? Well. At the same time last year, after iPhone X saw the world, weak pre-orders and slow buying pace were not nearly as strong as was suggested by the experts and awaited by the company. And this year, when economic situation of the world has sufficiently worsened it is peculiar to see whether the feeling of low necessity won over people’s desire to have a brand new iPhone right off the production line. And together with the demand for the new smartphones come new investors and traders.
A couple of days after the presentation pre-orders became available and we can now see the tendencies in the demand. And it is not nearly as high as Apple and us hoped for. It is even lower than the demand and number of pre-orders for iPhone X. how so? Well, we already talked about prices for the phones being the key point for the high or at least somewhat acceptable demand. And in this case prices can hardly be named affordable with the cheapest model in recent line costing $800.
Of course the full demand is going to become more obvious in Christmas time when buying presents and indulging one’s desires is going to become massive and go around the world. But three months are standing between us and that higher-demand-time. A lot of things can happen in this period of time including Apple getting under fire in Chinese-American trade war.
That trillion dollars’ worth of market cap can melt away pretty quickly in case Apple doesn’t find the public for the newest addition for their products including Apple watches, three new phones, Mac Books and other production. And once again that can barely happen without Apple adjusting their prices for the broad public.
All of the above-mentioned is causing Apple shares jump these days with stock being down yesterday and recovering positions today.
- by Anna K.