Apple Drags Down NASDAQ as China iPhone Ban Looms

All global indices have been experiencing downward pressure this week but the worst performing is the NASDAQ. The NASDAQ is primarily being pulled downwards by Apple stocks, which currently hold the highest weight within the index. Apple stocks have fallen 5.55% over the past week and have whipped off $190 billion worth of market value in the past two days. Apple holds a weight of 11.42%, more than any other stock within the index. However, Apple stocks have risen 0.32% during this morning’s futures market. 

When looking at the currency market, the US Dollar began the day declining but has also retraced back to the day’s open price. The US Dollar Index is trading at 104.97, which is 0.08% lower than the open price, but higher than the price ranges from earlier in the week. The best-performing currency on Thursday was the Japanese Yen and the US Dollar. The worst-performing currencies were the Euro and the Pound. The Pound specifically has come under pressure from inflation and the cost of living which is repelling regional investments. For example, this morning the UK Bureau of Statistics has confirmed the cost of renting a room in London has risen above 1000 Pounds for the first time. The UK still remains at the highest risk of a recession. 

NASDAQ - China Ban iPhones for State-Owned Enterprises

The price of the NASDAQ is declining for a fourth consecutive day primarily due to the risks of a recession, risks of higher inflation and the Chinese restrictions on certain technology products. The most recent report is regarding Apple, and more specifically, the iPhone. China is Apple's third-largest market, accounting for 18-19% of its total revenue. It is also where most of Apple's products are manufactured by its biggest supplier Foxconn. China has banned using iPhones in state-owned ministries and companies such as PetroChina. This company, for example, employs more than 506,000 individuals in China. According to analysts, the ban will likely damage sales in China, as it can dampen demand outside of these industries. 

65% of the NASDAQ’s components ended the day lower during yesterday’s trading session, and only 11% managed to end the day more than 1% higher. The most robust bullish trend was Intel Corp, which rose 3.24%. The most substantial declines were witnessed by Align Technology and Qualcomm, which declined by more than 7%. Qualcomm continues to drop by a further 0.39% during the pre-market open, and align Technology remains unchanged. 

However, on the positive side, members of the Federal Open Market Committee have signalled that there is a possibility of a pause. Chicago Fed President, Mr. Goolsbee, has advised that further interest rate hikes will trigger a recession. Mr. Goolsbee has also reminded economists that central Banks have never been able to tackle inflation in this way without triggering a recession. Other members, such as the Boston Federal Reserve President Susan M. Collins, said it’s too early to tell whether the Fed can stop raising interest rates.

During this morning’s Asian session, the NASDAQ formed a lower high and a third impulse wave. Therefore, the asset continues to follow a downward trend pattern according to wave theories and has crossed previous support levels of short-term timeframes. The NASDAQ moves into the bearish side of the Bollinger band and below the trend line on the 30-minute chart, which signals a further downward trend. Traders will monitor the price movement of the US Dollar, Oil and US Treasuries. If the US Dollar, Oil prices and bond yields rise, equities' prices will likely continue declining.

NASDAQ 30-Minute Chart on September 2023

Summary:

• Apple stocks declined 5.55% and have whipped off $190 billion worth of market value in the past two days. 
• The US Dollar began the day declining but has also retraced back to the day’s open price. The US Dollar Index is trading at 104.97, which is 0.08% lower than the open price, but higher than the price ranges from earlier in the week.
• 65% of the NASDAQ’s components ended the day lower during yesterday’s trading session, and only 11% managed to end the day more than 1% higher. 
• Boston Federal Reserve President, Susan M. Collins, said it’s too early to tell whether the Fed can stop raising interest rates.