Shares of Apple fell more than 8% this week, wiping out about $ 200 billion and dragging down the Dow and Nasdaq. Apple is now officially in the bear market along with other technology megastocks.

Apple fell in a bad week for stock markets, which are selling out stocks in almost every industry due to fears of rising Fed interest rates, weakening consumer confidence, rising inflation and challenges in the supply chain around the world. The Nasdaq Composite has fallen more than 7% so far this week and is on the verge of a six-week series of losses.

Apple faces some challenges in the supply chain, but the outlook for its business has not changed significantly this week.

The company is usually seen as a “safe” place for investors to park their money. The fact that it sells out along with everything else is a bad sign for other stocks and a sign of deteriorating investor confidence.

Jeff DeGraf of Renaissance Macro Research told CNBC on Thursday that there was nowhere to hide in the bear market – and that included Apple.

“For technology, when they start to take the lead in technology, it’s a better sign that they’re starting to take over,” DeGraff said.

“Our assumption is that the AAPL sell-off will continue, not because we know anything about iPhone shipments or revenue from services for this quarter, but because we believe that once investors start selling the best names in the breed, they rarely do one day, “Datatrek co-founder Nick Kolas said on Thursday.

This is a remarkable turnaround from last November, when high-tech stocks began to fall and Apple often attracted investors looking for a lower risk of betting on technology.

Apple still has a huge cash flow that allows it to withstand delays and return profits to shareholders. It generated $ 28 billion in operating cash flow in the March quarter, with total sales of $ 97.3 billion. He said he spent $ 27 billion in the quarter to buy back his own shares and pay dividends.

The weakening of consumer confidence has not begun to hurt iPhone sales – in fact, in the March quarter, each of Apple’s businesses grew except for the iPad (which Apple blames for the lack of chips).

When CEO Tim Cook was asked about the effects of macroeconomic conditions and inflation on her business in a profit talk last month, he said the company’s biggest problem was producing enough iPhones and Macs to meet global demand. no search delay.

“Right now, our main focus, to be honest, is on supply,” Cook said.

But even if Apple begins to feel the effects of deteriorating macroeconomic conditions, it remains a company with a world-renowned brand, first-class profit margins, stores in key malls and a collection of related products and services that appeal to affluent consumers around the world.

If growth slows, Apple will continue to generate huge profits and sales – even if it is no longer the most valuable company in the world.

https://www.cnbc.com/2022/05/12/why-its-bad-news-for-the-entire-market-when-apple-has-a-big-drop.html

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