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Yen Jumps as Apple Fans Growth Woes; Stocks Mixed: Markets Wrap

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By Andreea Papuc 2019/1/3

  • Apple suppliers fall after iPhone maker cuts guidance on China

  • Japanese yen surges on haven demand as Aussie dollar tanks

Suppliers to Apple Inc. in Asia tumbled with with U.S. stock-index futures after the iPhone maker added to global growth concerns with a cut in its sales outlook. The yen surged and gold advanced as investors flocked to safe havens.

Apple suppliers in South Korea and Taiwan paced declines after the company cut its first-quarter guidance for the first time in almost two decades, citing an unforeseen slowdown in China and fewer upgrades to iPhone models. Apple shares plunged in post-market trading. The wildest moves were in currency markets where the yen jumped and the Australian dollar slumped to the lowest in almost 10 years. Oil again slipped under $46 a barrel as it pared a rally on the back of Saudi Arabia trimming exports.

Broader equity losses throughout the region were muted as U.S. stocks staged a rebound to finish slightly higher. Oil producers underpinned gains in Australia on a report that Saudi Arabia lowered oil exports, fueling a surge in the price of crude. Treasuries advanced and won’t trade in Asia Thursday as Japanese markets are shut.

While U.S. President Donald Trump sounded positive tunes about reaching a trade deal with his counterpart Xi Jinping over the weekend, a weak reading on Chinese manufacturing and Apple’s warning come as stark examples to investors that the protectionist showdown is starting to have an impact on economic activity.

“There are genuine signs that that the sell-off last year was not only valid, but is now coming home to roost,” Evan Lucas, chief market strategist at Investsmart Group Ltd., said on Bloomberg Television. “The fact that Apple is showing you that their sales in China were under pressure -- you are seeing that idea that emerging markets, particularly China, are slowing faster than forecast.”

Among Apple’s Asian suppliers, Hon Hai Precision Industry Co., the main assembler of iPhones, dropped 1.3 percent in Taipei; in Korea, LG Innotek Co. tumbled 3.6 percent, and SK Hynix Inc. dropped 2.6 percent.

Elsewhere, the Australian dollar fell below 70 U.S. cents for the first time since 2016 and accelerated a decline after Apple trimmed its sales forecast. Australia’s 10-year bond yield fell to the lowest since October.

To read more on our markets coverage see the Markets Live blog.

Here are some events investors may focus on in coming days:

  • The U.S. December jobs report is due Friday
  • Fed Chair Powell is interviewed with predecessors Janet Yellen and Ben Bernanke at the annual meeting of the American Economic Association Friday. Atlanta Fed President Raphael Bostic joins a panel on long-run macroeconomic performance.

And these are the main moves in markets Wednesday:

Stocks

  • Hang Seng Index added 0.1 percent as of 9:48 a.m. in Hong Kong.
  • Australia’s S&P/ASX 200 Index gained 1.2 percent.
  • Shanghai Composite Index rose 0.2 percent.
  • South Korea’s Kospi index increased 0.1 percent.
  • S&P 500 futures dropped 1.3 percent. The S&P 500 rose 0.1 percent.
  • The MSCI Asia ex Japan Index lost 0.1 percent.

Currencies

  • The yen gained 1.3 percent to 107.53 per dollar.
  • The offshore yuan was stable at 6.8873 per dollar.
  • The Bloomberg Dollar Spot Index dipped 0.1 percent.
  • The euro was trading at $1.1350.
  • The British pound traded at $1.2545, down 0.5 percent.

Bonds

  • The yield on 10-year Treasuries fell six basis points to 2.62 percent.
  • Australia’s 10-year bond yield slumped 11 basis points to 2.18 percent.

Commodities

  • West Texas Intermediate crude fell 1.4 percent to $45.62 a barrel, trimming a 2.5 percent advance.
  • Gold futures rose 0.2 percent to $1,287.62 an ounce.

— With assistance by Garfield Clinton Reynolds

From: https://www.bloomberg.com/news/articles/2019-01-02/asian-stocks-to-be-hit-by-apple-sales-outlook-markets-wrap?srnd=premium-asia

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