Apple warning drives stocks lower
|Global stock markets are in retreat as investors digest a warning from Apple, while the pound has rallied following UK employment and wage data.
A warning from Apple has put the cat among the pigeons and provided the first real evidence that the coronavirus will have ramifications beyond China. Markets had been rubbing along in expectation that stimulus from China would smooth over any bumps in the road. But Apple’s warning upends those forecasts and suggests that we will see other companies reporting warnings. Apple’s stock has stalled over the past month, having moved in a straight line since August, and in the long-run this will likely prove to be a boon for those looking for a buying opportunity. US markets are also playing catch-up after their closure yesterday, which suggests there will be some follow-through to the expected weak open. The second half of February is usually a weak period for markets anyway, and Apple’s warning will merely intensify the selling pressure for the time being.
Official data showing a rise in the UK’s real wage bill will be heralded as a new dawn for the British workforce, and it has allowed sterling to mount a small rebound this morning. But the bigger news will be the Frost speech in Brussels, which promises plenty of hard talking in the year ahead as the new negotiations get underway. In such an environment, staying positive on the outlook for the pound will be an uphill, although perhaps ultimately rewarding, task.
Ahead of the open, we expect the Dow to start at 29,243, down 155 points from Friday’s close.
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