Stocks slipped on Wednesday as disappointing earnings reports from Alphabet Inc and Worldline compounded concerns over high interest rates. Alphabet Inc's shares plunged nearly 10% after reporting disappointing cloud services revenue. The Dow Jones Industrial Average finished down 0.32%, the S&P 500 lost 1.43%, and the Nasdaq Composite dropped 2.43%. The largest holding in the SPY (Standard & Poor’s Depositary Receipts) has been revealed to be technology giant Apple Inc. This disclosure has significant implications for investors and highlights the growing influence of technology companies in the market. Key U.S. funds are reducing their exposure to China and focusing more on American technology giants amid concerns over a Chinese economic slowdown. The move comes as credit risks at China Evergrande Group and other leading property developers have deepened. The Nasdaq Golden Dragon China Index, which tracks U.S.-listed Chinese companies, has dropped 15% since the end of July.
In related news, Apple Inc. (NASDAQ:AAPL) stock declined following reports of the Chinese government banning iPhone use by government employees. The market was also underwhelmed by the upgrades in the new iPhone 15. However, early reports indicate that demand for the new phone is in line with or better than investor expectations. Apple remains one of the most innovative and profitable companies in the mobile technology industry.
China's ban on Apple iPhones is accelerating across state firms and government departments. Multiple agencies and government-backed firms in at least eight provinces have instructed employees to stop bringing iPhones and other foreign devices to work. This prohibition is likely to block Samsung Electronics from parts of the Chinese mobile market. The ban began with a small number of agencies in Beijing and Tianjin in September and has now expanded to other provinces. The move is part of Beijing's campaign to reduce reliance on American technology.
China is intensifying its crackdown on iPhones, targeting Apple's App Store and tightening regulations on app developers. The move comes as part of China's broader efforts to increase control over its tech industry and protect national security. The Chinese government has been concerned about the potential for foreign apps, including those on iPhones, to collect and transmit sensitive user data. Apple has faced increasing pressure from the Chinese government in recent years, with several of its services being banned or restricted in the country. The crackdown on iPhones is expected to have a significant impact on Apple's business in China, which is one of its largest markets. Apple has been working to comply with Chinese regulations and has made efforts to store user data within China's borders. However, the latest crackdown could further strain Apple's relationship with the Chinese government and potentially lead to more restrictions on its products and services.
The Chinese government is reportedly expanding its iPhone crackdown, with staff in multiple state firms and government departments in at least eight Chinese provinces being told not to bring their iPhones or other Western phones to work. This is an expansion of Beijing's campaign against Apple, with China banning some central government employees from bringing their iPhones to work in September. The Chinese government has previously denied reports of restricting the use of foreign cellphones, but there are signs that this push may already be hitting Apple's position in the country. Chinese workers have discussed ditching their Apple devices over fears that their workplaces might ban them. Apple is also facing poor sales of the iPhone 15 and strong local competition from Huawei's Mate 60 in the Chinese market. Apple has been attempting to repair its relationship with China, but the reported expansion of China's iPhone ban suggests that its efforts may be in vain.
China is widening its ban on the use of iPhones by government employees. Multiple government agencies and state-owned businesses in at least eight provinces have instructed workers to cease bringing iPhones and other foreign devices to work. This widening effort coincides with the boom in popularity of Chinese mobile phone brands. The ban was first reported in September, followed by new rules that could block Apple from offering many foreign apps on its iPhone app store in China. The ban aims to close a loophole in China's strict internet regulations. The crackdown could cost Apple revenue in the world's largest mobile market. Apple CEO Tim Cook sought to ease concerns about losing market share in China. The ban comes at a time when iPhone sales have been lagging historical trends. Apple has not yet commented on the ban.
China has expanded its ban on certain iPhone models, which could potentially hurt Apple's profits. The ban is a result of a patent dispute between Apple and Qualcomm. The ban affects older iPhone models, including the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus, and iPhone X. Apple plans to appeal the ban and has stated that all iPhone models remain available for customers in China. The ban is expected to have a limited impact on Apple's overall profits, as the affected models account for a small percentage of its total sales in China. However, it could still impact Apple's reputation and market share in the country. The timing of the ban is significant, as it comes amid the ongoing trade tensions between the US and China. Apple's stock price has already been affected by the news of the ban, with shares dropping in value. Overall, the expanded iPhone ban in China poses a potential risk to Apple's profits and market position in the country.
Apple, along with other tech giants including Amazon, Alphabet, Microsoft, Meta Platforms, Tesla, and Nvidia, experienced a four-day losing streak, resulting in a $383 billion decline in market value. Apple's shares were down 4.6% during this period. The Nasdaq 100 Index also fell during this time. The reversal in the tech sector's performance is seen as a normal pullback after a strong rally in 2023. Investor doubts about the sustainability of the rally were confirmed, as gains cooled in the second half of 2023 due to concerns about the Federal Reserve's ability to execute a soft landing for the US economy. Some members of the tech group, such as Apple and Tesla, faced specific stock pressure due to factors like downgrades and competition. However, it is still too early to determine if the tech-focused rally is over, as some companies are still below their all-time highs and have room for growth. Going forward, tech companies need to deliver not only solid technology but also profitable technology. The performance of the tech sector in 2024 will depend on their ability to meet these expectations.
Air China Limited (OTCMKTS:AIRYY)'s share price crossed below its 200-day moving average of $13.26 on February 24th, 2024. The stock traded as low as $10.95 and last traded at $10.97, with a volume of 680 shares traded. The firm has a market capitalization of $8.89 billion, a price-to-earnings ratio of -5.40, and a beta of 0.46. Air China provides air passenger, air cargo, and airline-related services in Mainland China, Hong Kong, Macau, Taiwan, China, and internationally. The company operates in Airline Operations and Other Operations segments. It has a 50-day moving average of $11.83 and a debt-to-equity ratio of 4.02.
Shares of Conn's, Inc. (NASDAQ:CONN) crossed above its 200-day moving average during trading on Friday. The stock has a 200-day moving average of $3.89 and traded as high as $4.01. Conn's shares last traded at $3.83, with a volume of 89,934 shares. Separately, a research note downgraded Conn's from a "hold" rating to a "sell" rating. The company has a current ratio of 3.38, a quick ratio of 2.41, and a debt-to-equity ratio of 1.72. Conn's last reported quarterly earnings on December 18th, with a negative return on equity of 34.65% and a negative net margin of 13.51%. Hedge funds and other institutional investors own 49.43% of the company's stock.
International Consolidated Airlines Group (LON:IAG) stock crossed above its 200-day moving average of $151.71 on Thursday. The stock traded as high as $177.70 and last traded at $176.75, with a volume of 41,870,833 shares. Analysts at Bank of America reiterated a "buy" rating and set a target price of GBX 230 ($2.91) on the stock. Royal Bank of Canada raised their price target on shares of International Consolidated Airlines Group from GBX 200 ($2.53) to GBX 220 ($2.78) and gave the company an "outperform" rating. The company has a quick ratio of 0.63, a current ratio of 0.63, and a debt-to-equity ratio of 490.60. The company has a market capitalization of £8.70 billion and a PE ratio of 411.05. International Consolidated Airlines Group provides passenger and cargo transportation services in the United Kingdom, Spain, the United States, and the rest of the world. It also provides aircraft leasing, aircraft maintenance, tour operation, air freight operations, call center, ground handling, trustee, retail, IT, finance, procurement, storage and custody, aircraft technical assistance, human resources support, and airport infrastructure development services; and manages airline loyalty programs.
GoDaddy, a website and e-commerce specialist, has been added to the S&P 500. The company has shown strong growth across its top- and bottom lines, with $1.1 billion in total revenue during the first quarter of 2024. GoDaddy's core operating segments are highly profitable, and its EBITDA margin has increased. Despite a flat customer base, the company has been able to generate respectable revenue growth and profit expansion, indicating a sticky user base. With the U.S. economy adding jobs, GoDaddy is expected to benefit from the creation of new businesses, especially in the small and midsize enterprise (SME) demographic. GoDaddy stock is currently trading at a P/E ratio of 12, suggesting it may be undervalued compared to the broader market. The company has also repurchased shares under its share repurchase program, indicating management's belief that the stock is undervalued.
Waterdrop Inc. (NYSE:WDH), a China-based company that offers online insurance brokerage services, has been ranked 10th on the list of best NYSE penny stocks to buy. The company reported a Q1 total revenue of RMB705 million, a 16.3% increase YoY, and achieved a GAAP net profit of RMB80.6 million, a 62.2% increase YoY. Waterdrop Inc. has also issued its first special cash dividend and actively pursued share buybacks. Renaissance Technologies is the only shareholder of Waterdrop Inc. with a position worth $210,000 [a6c882b8].