Thursday, 3 January: Let’s forget this week and pretend next week is the New Year shall we? Another down turn across global equities came after Apple chairman Tim Cook wrote to investors last night warning of a downturn in China trade and a cut to Q1 guidance. The festive period is Apple’s strongest, but a fall in sales to around $84bn (earlier estimates of $89-$93bn) would result in Apple’s first festive reporting slowdown in Tim Cook’s tenure. Shares fell 7% in after-close trading, further falling c.10% at the time of writing as fears over a slow down in the world’s second largest economy take hold. China accounts for around 20% of Apple’s overall revenues and further highlights Apple’s struggles to sell its more recent iPhone models.
The Japanese yen was a fleeting beneficiary of Apple’s results. Often known for its “safe-haven” status, the yen benefitted as investors looked for security. The dollar plunged to 104.96 overnight, its lowest level since March 2018. As mentioned, this was short lived, with the dollar returning to gains as Thursday trade passed, although weak ISM manufacturing data for December in the US further added to woes. The reading of 54.1 was considerably lower than the 57.9 expected; the fall from November’s 59.3 reading is the biggest fall since October 2008. Equity declines were reflective in major European indices following the data announcement, with London, France and Germany unable to recover at the close. Indices closed -0.62%, -1.66% and -1.45% respectively. The Dow Jones and S&P are down 1.59% and 1.07% at the time of writing.
Asian stocks felt the brunt of Cook’s letter overnight, with many Apple suppliers falling heavily. As European indices opened for the day, losses were confined to London, although this wasn’t sustained over the day. A good Christmas trading update from Next saw them sit at the top of the blue-chip index for the second day. Reporting a 1.5% rise in full year sales to Christmas, aided more so by the retailer’s online offering, Next further added a strong 3 week period up to Christmas, alongside good October half term sales, offset a weaker November.
Someone who is having a good week is Greggs’ head of marketing. Greggs has around 150k followers on twitter, a good place to announce its new “Vegan Sausage Roll” you would think. It’s certainly got people talking, and not just in the North-East. Last night, Piers Morgan retweeted Greggs’ announcement to his 6.5m followers, and he basically hasn’t stopped talking about it since. #greggsvegansausageroll is now one of the top trends on Twitter, and without having to lift a finger, Greggs’ announcement has reached over 44x as many twitter users.