Last November, shares of Apple Computer (NASDAQ:AAPL) were hammered after they missed sales projections. Just after the closing bell today they announced AGAIN they will miss revenue projections for this quarter too! In afterhours trading, the entire stock market is plunging on the negative news, while Apple shares are down over 7.5% to new lows.
Also last November, I mentioned “There is something rotting at Apple, and it may be the ground (the economy) it is trying to live on.” You can find that article here: https://practicalpaul.com/2018/11/01/apple-computer-doesnt-make-the-grade-stock-down-7-after-hours/
In today’s announcement, Tim Cook, CEO of Apple, is blaming the poor performance on trade policies with China. I think it has far more to do with the excessive $1000 price tag on Apple iPhones, and consumers are resisting upgrades in the face of a weakening economy. After all, Apple is not the only manufacturer to be dealing with this issue.
What’s hitting Apple will be hitting many other companies as they begin to accept that the economic landscape is very different than a year ago.
We are entering a rapidly unfolding recession (possibly a depression). I would look for many earnings downgrades as Wall Street analysts adjust their formal expectations.