First of all, Happy New Year to all of you. I hope for you that you can stick to all of your New Years resolutions. Just keep in mind that you can become a totally different person if you stick to the plan. On todays agenda is the big loss for Apple and co. and their influence on the big indices.
Almost everyone had a very nice couple of days, either partying of spending time with people they love and now we are focused on the new year. Apple had a not so nice start in 2024 though. As the founder and investors of Apple woke up to a 4.6% loss from December 29. 2023 to January 34. 2024. This is a market-cap loss of about $300 to 400 billion. But not just Apple hurt this. Indices like the S&P 500 or Nasdaq experiences drastic losses as well.
What went wrong with Apple that caused the loss
While there are many things that went wrong with Apple, the main cause is the massive decline in revenue. This decline in revenue caused a drop in sales of different products of the company. The Sales of the companies Mac’s, iPad’s, iPhone’s as well as other products declines massively. The services of the company are also called as a weak point of the company by some experts. And last but not least Apple is facing pressure from App developers to offer users to pay for apps via third-part payment options. This would cut Apple’s App Store fees by about 30%. Not just factors from the company but also the general feeling about tech firms has influenced their stock. At the start of the new year 2024 tech companies have suffered a big loss in general, not just Apple. There is also a lot of discussions about the ban of some Apple Watches. All of this left investors scared. Not just with apple but with the tech industry in general.
[finviz ticker= AAPL]The loss of the Magnificent Seven
Some experts may suggest that is the start of the ending of the tech focused rally. Since all of the companies have suffered a loss, leading is apple with a loss of 4.6% which erased $383 billion in market value. The companies in the Magnificent Seven include Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp., Meta Platform Inc., Tesla Inc., and Nvidia Inc.. The fast development of AI caused the very successful tech rally last year. It caused a surge of more than 100% of the Magnificent Seven. But now some companies start to suffer. Next to Apple there is Tesla that just lost it’s place as top seller of Electric Vehicles to a company in China called BYD Co..
It is not sure to say if the tech rally really is over because it is normal that after a long period of losses, investors start to get nervous. What is sure though is that it is a first sign of weakening in the tech branch. Some experts expect though that at least Teala will get out of their loss streak very soon since they delivered more cars than expected from analysts in the fourth quarter.
Overview of indices:
(S&P500, Nasdaq, Dow Jones Industrial Average and German Stock Exchange)
The influence on the big indices
Indices like the S&P 500 and the Nasdaq suffered a lot from the loss of Apple and co. The S&P 500 lost a total of about 1.5% from December 29. 2023 to January 3. 2024 and The Nasdaq lost in the same time about 3.5%. That is after a streak of 9 weeks of winning and profits. These losses are the result of the suffering from the Magnificent Seven. The question now is, will this trend continue or can the tech companies stop their losses and with that get a decent result for the indices as well.
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