Apple stock 'could be the canary in the coal mine' for China reopening: Strategist – Yahoo Finance


- Advertisement -

Investors curious about the next move in the broader market would be wise to pay extra attention to shares of multinational tech giant Apple (AAPL).
"One of the reasons that has been helping sentiment, particularly in industrial stocks and things like that, is the idea that China is going to be reopening," Interactive Brokers chief strategist Steve Sosnick said on Yahoo Finance Live (video above). "If there is another wave of lockdowns in China, that really upends that story. It upends global growth potential. And so, yes, Apple could be the canary in the coal mine."
Apple stock has gained about 2% in the past month, underperforming the S&P's nearly 7% gain.
The COVID-19 situation in China, a key manufacturing hub for Apple, has taken a turn for the worse in recent weeks — impacting the operations of Apple, Tesla, and other U.S.-based companies.
China's COVID-19 cases are surging toward record highs just as the country was moving away from its zero-COVID policy, which had spurred optimism in global asset markets.
On Wednesday, China's National Health Commission (NHC) reported over 28,000 infections nationwide in the country for the prior day. That's roughly equivalent to the 2022 peak in April, according to the NHC.
Apple's business has been thrust into the limelight amid the COVID-19 resurgence in China.
"Apple is too big to ignore," Sosnick stressed.
Violent protests erupted at the flagship plant of iPhone maker Foxconn this week, with protestors smashing windows and clashing with authorities amid harsh COVID-19 restrictions.
"Regarding any violence," Foxconn said in a statement on Wednesday, "the company will continue to communicate with employees and the government to prevent similar incidents from happening again."
If COVID-19 cases continue to climb in China and fresh lockdowns ensue and weigh on global economic growth, the current move in Apple's stock could hint at a broader pullback in markets soon.
"After battling the macro headwinds and delivering a strong September quarter/guidance in a stark contrast to the rest of Big Tech, this latest zero Covid situation is an absolute body blow for Apple in its most important holiday quarter," Wedbush Managing Director Dan Ives wrote in a note to clients. "With demand remaining firm into holiday season, we would estimate this negatively impacting roughly 5% of iPhone sales this quarter based on impacted China production/supply issues. While not the news any bull wants to hear from Apple, its a supply issue and related to China's zero Covid policy which is a very frustrating situation for Apple (and its investors) yet again, but not demand driven."
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
Click here for the latest trending stock tickers of the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
Related Quotes
Stocks gained on Wednesday after signs a slowdown in the Fed's rate hikes could be coming next month.
"We are committed to continuing to work cooperatively with regulators around the globe to allow the transaction to proceed, but won't hesitate to fight to defend the transaction if required," an Activision Blizzard spokesperson said. Shares of Activision fell about 2% in extended trading after closing 1% higher. Microsoft, maker of the Xbox game console, announced in January the deal to buy Activision, the maker of "Call of Duty" and "Candy Crush" games, in the biggest gaming industry deal in history as global technology giants staked their claims to a virtual future.
Yahoo Finance Live anchors discuss the bullish analyst calls on Tesla stock out from Citi and Morgan Stanley.
A “substantial majority” of Fed officials suggested earlier this month slowing the pace of rate hikes would soon be appropriate.
HP Inc. layoffs will have one benefit to investors.
Some Twitter employees who chose to stay at the company as it transformed to "Twitter 2.0" are being shown the door.
Tesla stock woes have caught the attention of one noted Wall Street bear on the EV maker.
The S&P 500 still faces its 200-day line with key economic data looming. Tesla rebounded from bear market lows while five medical stocks are near buy points.
One of the C-suite executives at the Tempe-based online used-vehicle retailer bought a large chunk of company shares on the open market, typically a sign that management is confident that the share price will increase.
FTX lawyers say a substantial amount of assets are missing or stolen in latest bankruptcy proceedings; Cathie Wood still sees Bitcoin at $1 million
Chip Gaines opened up about his kids' lives in the spotlight and said that he's "nervous" about how his son Crew has been adjusting to growing up on camera.
Hundreds of workers clashed with authorities at Foxconn's iPhone plant in Zhengzhou, China on Wednesday. Analysts warn it could affect already ailing iPhone production.
Amazon's voice assistant Alexa is part of a devices unit at the company that is expected to lose about $10 billion in 2022, according to a new report.
A face of the regime of Sam Bankman-Fried, the founder of FTX, was revealed on November 22 during the firm's first hearing in Delaware bankruptcy court. The 30-year-old former trader was virtually considered an "emperor" among his employees: This is the image used by an FTX lawyer to describe what happened after Bankman-Fried filed for Chapter 11 bankruptcy on his crypto empire made up of FTX and Alameda Research. Everyone realized for the "first time the emperor had no clothes," James Bromley, co-head of the restructuring practice at law firm Sullivan & Cromwell, told Judge John Dorsey.
S&P Global said on Wednesday its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 46.3 this month from a final reading of 48.2 in October. A reading below 50 indicates contraction in the private sector. Activity is slumping under the weight of the Federal Reserve's most aggressive interest rate-hiking cycle since the 1980s aimed at curbing inflation by dampening economic demand.
It’s too little, too late for traders looking to pile up bets against meme stock darling GameStop.
Yahoo Finance Live breaks down the latest round of advertisers to pullout their exposure on Twitter under Elon Musk's leadership.
Norwegian Cruise Line shows rising price performance, earning an upgrade to its IBD Relative Strength Rating from 76 to 81.
Disney's "Avatar: The Way of Water" has been greenlit for a China release.
According to a regulatory filing, Buffett on Wednesday donated another 2.4 million of the conglomerate's Class B shares, worth about $759 million based on their closing price. Buffett donated 1.5 million shares to the Susan Thompson Buffett Foundation. Another 900,000 shares were split evenly among charities run by his children Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the Novo Foundation.


- Advertisement -


Please enter your comment!
Please enter your name here

Share post:




More like this

Societe Generale agrees to sell two more African businesses

Societe Generale, France's third-biggest listed bank, has agreed to...

Exxon Mobil forecasts increases in project spending, oil output

Exxon Mobil will target annual project spending of between...

Oil drops on demand worries after US gasoline inventories swell

Oil prices fell by 2.5% on Wednesday, as a...

COP28: Zambia’s first green bond to be issued by year-end by Copperbelt Energy Corp

Zambia's Copperbelt Energy Corporation (CEC) will issue the southern...