Apple dropped the bomb that it was cutting its revenue outlook by as much as $9 billion from estimates due to weaker demand in China.
The market reacted to Apple’s blood curdling, once-in-a-generation news with terror (seriously, since the second coming of Steve Jobs, has Apple ever announced anything this bad?), as you can imagine:
The Dow dropped 660 points, or 2.8%, on Thursday after Apple warned it will badly miss its quarterly sales forecast because of weakening growth and trade tensions in China.
Apple (AAPL), among the world’s most widely held stocks, plummeted 10% in its darkest day in six years. The former king of the stock market fell to the fourth-biggest public company, behind Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL).
The news sent shudders through global markets. The Nasdaq plunged 3%, closing back in bear market territory. The S&P 500 shed 2.5%, led lower by tech and industrial stocks. The market ended near the lows of the day.
But according to Kevin Hassett*, chairman of the White House’s Council of Economic Advisers (emphasis mine):
“There are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded … until we get a deal with China,” Hassett said on CNN. “It’s not going to be just Apple.”
In other words, it was Prznint Art-of-the-Deal’s totally sane, easy to win Trade Wars.
Now in a sane Administration 1) this would never be happening, and B) Hassert’s next words would be that they’ve seen the error of their ways and would change the policy, and beg for forgiveness and offer his resignation. This is NOT that administration, however.
Instead, Hassett said that Prznint Stupid’s policies, which are destroying corporate profits and the stock market investors, is the plan and all is well:
“However, Hassett said, “If we have a successful negotiation with China then Apple sales and everybody else’s sales will recover. But right now, China is feeling the blow of our tariffs.”
We all are feeling the blow, buddy, and it’s clear who is doing the blowing.
* Hassett is one of the co-authors of the laughable Dow 36,000 book which was published just as the Dot Bomb Crash destroyed the economy, so he is certainly qualified for this optimistic moment. Oddly, I couldn’t find a link to the book on Amazon. Go figure.