Economy

US stocks set for another big fall after Apple's warning

US stocks set for another big fall after Apple's warning”

"The yen is undervalued and can strengthen both if the dollar weakens across the board, but also if our broadly positive view that the global economy will stabilize at potential growth this year proves to be wrong, the Fed pauses and/or we get a risk-off market correction-as we saw at the end of 2018", said Athanasios Vamvakidis, FX strategist at Bank of America Merrill Lynch.

USA stock futures fell on Thursday after a rare revenue warning from Apple Inc added to worries about slowing global growth, but a move by China's central bank to help struggling smaller firms lifted shares there, cushioning losses for Asian markets.

Apple blamed fewer iPhone upgrades and slowing sales in China in its most recent quarter, its first such warning since 2007.

Shares in the company fell 7.6 per cent to $146 in after-hours trading and US stock markets were poised for further big falls at the open.

MSCI's broadest gauge of Asia-Pacific shares outside Japan slipped 0.2 per cent early in the Asian day and losses were expected to mount when trading opened in more tech-heavy markets in the region.

The ASX has surged ahead with across-the-board gains, while the Aussie dollar has mostly rebounded from a flash crash that hit many major currencies.

Survey data from the Institute for Supply Management showed US factory activity slowed more than expected in December, sending stocks on Wall Street lower. Shares fell in Singapore but rose in Thailand, Indonesia and the Philippines. Japanese traders were on holiday.

China's central bank said late on Wednesday it was adjusting policy to benefit more small firms which are having trouble obtaining financing, in its latest move to support the cooling economy.

While more fiscal and monetary policy support had been expected in coming months on top of modest measures a year ago, some analysts wonder if more forceful stimulus will be needed to stabilise the world's second-largest economy.

While more fiscal and monetary policy support had been expected in coming months on top of modest measures previous year, some analysts wonder if more forceful stimulus will be needed to stabilise the world's second-largest economy.

Apple's surprise announcement weighed on tech shares across Asia, most notably in Taiwan and South Korea.

Currency markets saw a wild spike in volatility in early Asian trade, with the yen moving sharply higher against the USA dollar, breaking key technical levels and triggering stop-loss sales of US and Australian dollars.

Apple's warning, its first since 2002, deepened concerns about the Chinese economy, which had been showing signs of stress amid a trade war with the United States.

The Aussie tumbled as far as ¥72.26 to the Australian dollar on Reuters dealing, a level not seen since late 2011, having started around ¥75.21.

It briefly hit a low of 67.49 USA cents, its lowest level since early 2009, before making up half of its losses in another five minutes.

The dollar index .DXY , measuring the greenback against a basket of six other currencies, was last down 0.5 percent. Brent crude rose to US$54.68 per barrel. Slowing global growth is expected to coincide with an increase in crude supply, depressing prices.



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