Morning 2-18

Risk Off Theme Due to this Apple headline:


WSJ: Apple said they won’t meet their rev f/c due to the coronavirus outbreak which has limited iPhone prod for worldwide sales & capped Chinese demand; outside of China, demand for products has been strong & in-line with expectations https://on.wsj.com/39LQ99w Apple Unlikely to be the last Firm to Lower guidance due to Corona Virus)


More apple … Apple: Investor update on quarterly guidance- Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors….The first is that worldwide iPhone supply will be temporarily constrained….The second is that demand for our products within China has been affected.(apple.com)

These headlines adding to the negative sentiment:


RTRS Sources: US administration is considering changing US regs to allow it block chip shipments to Huawei; the proposal has been drafted but approval is not certain
US weighs new moves to limit China access to US chip tech https://on.wsj.com/39KrPEX

RTRS HSBC: FY adj pretax $22.2b vs $21.77b cons; FY adj rev $55.41b; Q4 interim dividend $0.21/shr; plan to suspend buy backs in 2020 & 2021; aim to reduce US branch network by around 30%, expected to incur costs of ~$6b & $1.2b in asset disposal costs
German Feb ZEW economic sentiment 8.7 vs 21.5 expected and 26.7 previously so a sharp fall on the month although the Jan rebound was very strong at the time (IFR)
WMT “Holiday sales lower than forecast and Guidance was short of Analysts’ expectations (BBG)


‘Every scenario on the table’ in China virus outbreak: WHO’s Tedros- “The data also appear to show a decline in new cases,” he told reporters. “This trend must be interpreted very cautiously. Trends can change as new populations are affected. “It’s too early to tell if this reported decline will continue. Every scenario is still on the table,” he said.


https://www.reuters.com/article/us-china-health-who-evolution/every-scenario-on-the-table-in-china-virus-outbreak-whos-tedros-idUSKBN20B1OF

Markets:
The peak has Not been reached, yet even though Business, Gov’t and CEO’s would like to declare it so. The longer We go with a peak in the Virus the larger the subtraction from Expected Global GDP, these are measures in Months not weeks. End of February was initial call for peak in virus and business getting back to something resembling Normal, if that Changes to Mid or late March expect more cuts to GDP.
Apple-3%, Nasdaq -.5%, Spoos -.4%, Stoxx 50-.5% 30 year yields dipped below 2% lowest since September. A quite active weekend for Bitcoin down 6.75% yesterday,Euro trading down to 1.08 level approaching 3 year lows

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