Apple’s share price surged over 5% in extended trading as confidence was re-installed by satisfying holiday-season earnings and healthy growth in its service and wearable devices segment, which partly offset falling iPhone sales.
Apple’s forward quarterly revenue guidance of $55-59 billion also came in line with expectations.
Apple’s total holiday season sales of $84.3 billion reflects a 5% decline on a year-on-year basis, marking possibly a turning point of the company’s growth trajectory after 18 years of uninterrupted expansion. Nonetheless, nearly one-third of its market value was wiped out over the last four months, bringing its trailing P/E down from 20x to 12.7x.
Technically, its share price has bottomed out and recovered the 10% gap down resulting from its profit warning issued on 2 January. The 10-Day SMA has flipped upwards and the MACD has formed a bullish convergence, suggesting the worst is over for its share price from a technical point of view.
The pound gave up gains on Tuesday after hitting a key resistance level at the 1.320 area. The UK parliament has backed Theresa May’s draft Brexit plan, with several amendments to replace the Irish backstop with ‘alternative arrangements’. The ball is now kicked to the EU to review this revised deal, and the outcome is uncertain as Brussels has made it clear that ‘anyone who thought the bloc might offer improved terms if MPs in Westminster rejected the deal would be disappointed’. Brexit’s deadline of 29 March remains unchanged.
Technically, GBP/USD has retraced and attempted to test its 10-Day DMA support at around 1.303 area. Immediate resistance remains at 1.320.
US-China trade talks start in Washington today and the progression will be on top of this week’s event calendar. US accusation of Huawei – China’s biggest telecommunication technology giant – for stealing technology and bank fraud set a complicated context for the trade negotiations. US treasury secretary Mnuchin expects ‘significant progress’ to be made this week, while China side remains fairly silent.
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