Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Apple (APPL) warned investors that they were unlikely to hit their March guidance figures due to a major disruption in manufacturing across China. The coronavirus has taken it’s toll on the tech giant as factories across China have had major disruptions in production. It’s pre-market suggests a 6% dip in share price at open, which may become the trend in the coming months. Coronavirus effects are still yet to be felt within the economy, and with such a large percentage of Apple’s manufacturing in China it seems it may only be the beginning.
Some investors may see this dip as an opportunistic time to buy, and once Apple recover from it’s dip in revenue over the 6 month period investors may see it as a good time to re-enter. The biggest issue is that the Coronavirus is still causing problems in China – effecting production and efficiency of many US and AUS companies. Apple’s dip may be the start of many businesses feeling inertia as production slows in the next few months. This would involve companies still heavily relying on China to produce their goods for them.
Furthermore, the effect on Apple extends across it’s production but also the total demand in China for their products. As China reaches an emergency level threat, it’s spending patterns have switched from purchasing luxury items to essentials to survive the wave such as hand sanitisers and masks. Many companies such as the Australian biotech company Zoono Group Ltd ($ZNO) have benefited from an increase in demand for sanitary products.Learn more about the Coronavirus here
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written By Tyger Fitzpatrick, Founder of YIG.