Thanks in large part to a strong showing in Apple’s June quarter, U.S. stocks were on the move higher with tech stocks getting a boost.
According to a report in Reuters, in addition to Apple’s quarterly results, worries about a trade war between the U.S. and China eased Wednesday (Aug. 1) driving stocks higher. Apple is currently in striking distance to becoming the first company to hit a market capitalization of $1 trillion. A race has been on between Apple, Amazon and Microsoft to be the first company to reach that market capitalization. Apple’s strong showing comes in the wake of disappointing results from Facebook and Netflix which weighed on tech stocks in recent days.
“Apple stock move and its results will be positive, but whether that is a long-lasting effect on the tech sector is a question that cannot be answered,” Randy Frederick, vice president of trading and derivatives for Charles Schwab said in the Reuters report. “There is a big additional tariff that is being weighed and could be put into place at any moment, which is a concern.” Reuters noted that the White House is mulling slapping a 25 percent tariffs on goods coming in from China instead of a 10 percent levy. China has vowed to retaliate but nothing has come of it in trading so far on Wednesday (Aug. 1).
For the quarter ending in June, Apple surpassed Wall Street views, buoyed by sales of its iPhone X, which comes with a starting price tag of $999 and subscriptions from its App Store, Apple Music and iCloud, reported Reuters. Apple also allayed growth concerns by forecasting revenue for the next quarter above what analysts were looking for. September typically brings a refresh cycle for the iPhone with expectations mounting that it may roll out new LCD and OLED models. For its fiscal third quarter, Apple weighed in with revenue of $53.3 billion and profit of $2.34 a share. Wall Street was looking for revenue of $52.3 billion and EPS of $2.18. The company sold 41.2 million iPhones, a number under analysts’ expectations — but the average selling price surpassed expectation by $30 as consumers opted for the pricier iPhone X, reported Reuters.