Finance

Apple bites Wall Street’s bulls

Apple’s sales warning slammed Wall Street Thursday morning. As Fred Katayama reports, it’s a gloomy omen for Wall Street bulls who were hoping for recovery from December’s steep sell-off.

Apple’s sales warning slammed Wall Street at the market open. That, along with its stock’s nine percent drop Thursday morning, are gloomy omens for Wall Street bulls hoping for a recovery from December’s steep sell-off. Optimists had argued stocks had become undervalued. But if Apple’s red flag spawns other companies to issue warnings, the S&P 500 may appear less of a bargain.

Synovus Trust senior portfolio manager Daniel Morgan said, “It raises concerns about whether current estimates for the quarter are too high.”

Apple’s downwardly revised first quarter revenue estimate widely fell short of Wall Street’s targets. On average, analysts predict S&P 500 companies will grow their earnings per share by 7 percent in 2019. That is far below the EPS growth of 24 percent achieved last year.

Apple cited slowing iPhones sales in China as the culprit. That hurt stocks of its suppliers such as Skyworks Solutions, Broadcom and industrials with big China exposure like Boeing, Caterpillar and Deere.

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