Reduced demand in China and a delayed factory opening is derailing Apple’s trajectory to meet its revenue target for the spring quarter, which was originally forecast to be around US$ 63-67 billion.
The company highlighted that it doesn’t expect to meet its revenue guidance for March quarter due to the impact of the virus in China, which is a key consumer market for its products and where most of the iPhone devices are assembled in.
Apple’s share price has been consolidating at around US$ 320 area for the past two weeks, lacking any positive catalysts to reach further upside. Trading at a price-to-earnings ratio of 25.6 times, Apple’s valuation is at its decade high.
In Singapore, investors will focus on Singapore Budget 2020 today for clues of fiscal stimulus on SMEs, private sector and households against the impact of the virus. Yesterday, the Ministry of Trading and Industry (MTI) has revised down the city-state’s 2020 GDP forecast to between -0.5% to 1.5% as Covid-19 is expected to disrupt tourism and supply chains.
A wider-than-expected budget deficit this year will likely propel the rally of USD/SGD, which has already jumped over 3% since the outbreak of the disease in end January. Technically, USD/SGD is challenging an immediate resistance level at 1.390, breaking out above which will open room for more upsides towards the 1.400 area.
The dollar index extended its rally beyond 99.0 this morning, registering a year-to-date return of 3.06%. US economy has largely outperformed the rest of the world and is relatively less impacted by Covid-19 compared to the Asia-Pacific region, strengthening US dollar’s status as a safe-haven.
In Asia, Shanghai Composite rallied 2.2% yesterday to 2,983 points with brokerage sector leading the gain. The China index has rallied in 10 out of the past 11 days, gradually filling up the ‘gap down’ formed on 3rd February. The number of new Covid-19 disease cases within and outside of Hubei province are on course of declining. This helped to alleviate market concerns of it spreading further.