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Markets Fall Following Apple Warning, Slump In ZEW Economic Sentiment

Published 19/02/2020, 06:32
Updated 21/10/2020, 09:15

Ostensibly a session where investors were forced to consider the economic impact of the coronavirus outbreak by Apple (NASDAQ:AAPL) and the day’s data, the Western markets still managed to keep their losses at the more reasonably end of the spectrum.

Tuesday began with a warning from the iPhone maker that its revenue for the current quarter would be lower than forecast due to manufacturing issues in China. That was followed by a pair of ZEW economic forecast figures that drastically undershot expectations; the German reading fell from 26.7 to 8.7, while the Eurozone-wide number slumped from 25.6 to 10.4.

Yet instead of panicking, the European and US indices posted relatively mild declines. The FTSE was down 0.7%, slipping under 7400, as was the DAX, which dipped below 13700. Even the Apple-burdened Dow Jones wasn’t too upset, its 200 point slide still leaving it one good session away from returning to its all-time highs.

Potentially helping to drown out the alarm bells was President Xi Jinping’s argument that China can still hit its 6% growth target in 2020 – a bold, likely misleading claim that nevertheless may have acted to mitigate Tuesday’s losses.

Elsewhere, despite a sharper than forecast drop in wage growth, the pound rose following a UK jobs 180k people added to the labour force in the 3 months ending December 2019. That new Chancellor Rishi Sunak confirmed the March 11th budget wouldn’t be delayed may have also helped sterling rise 0.2% against the dollar and 0.4% against the euro.

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