Apple, Chipmakers Soar Following News of Tariff Delay




  • In Tech
  • 2019-08-13 14:16:08Z
  • By Bloomberg
 

(Bloomberg) -- Apple Inc. shares spiked on Tuesday after the U.S. delayed a 10% tariff on certain Chinese imports, including such technology products as cell phones and laptop computers.

The stock jumped as much as 5.2%, its biggest one-day percentage gain since July.

The iPhone maker is highly correlated to trade issues with China, given the country is both a key part of its supply chain as well as a major source of revenue. According to data compiled by Bloomberg, nearly 20% of Apple's 2018 revenue was derived from China, with cell phones a dominant part of its overall business. The company's iPhone represents more than 60% of its sales.

The 10% tariff had been seen as a major potential headwind. According to Wedbush analyst Daniel Ives, the tariffs would have lowered Apple's 2020 earnings by 50 to 55 cents a share had they gone into effect. (The consensus is for earnings of $12.76 a share in 2020, per Bloomberg data.)

"The overall China tariff/demand situation represents a $20-$25 overhang on Apple shares and will remain a lingering cloud over the story in the near-term," Ives wrote in a note published Aug. 13, prior to the news about the tariff delay.

Apple was not the only company to spike off the news, with the Philadelphia Semiconductor Index jumping as much as 2.6% in morning trading. Chipmakers have been among the most impacted by trade-related uncertainty; on Monday, Cowen wrote that a demand recovery for the industry was "likely capped until a trade resolution is reached."

Among specific semiconductor stocks, Texas Instruments rose 2.4%, Micron Technology spiked 6.2% and Applied Materials was up 2.5%.

Best Buy Co Inc., the technology retailer, surged 8.3% following the news of the delay.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

COMMENTS

More Related News

Billionaire Michael Novogratz Says Rich Worried About Warren Should
Billionaire Michael Novogratz Says Rich Worried About Warren Should 'Lighten Up'

(Bloomberg) -- Billionaire Michael Novogratz has a message for his rich friends: Stop worrying so much about Elizabeth Warren."You're not victims, you're the richest people in the world," said Novogratz, the former Goldman Sachs partner who's now investing in cryptocurrency as founder of Galaxy Investment

House GOP Leader Praises Mark Zuckerberg for Political Ads Policy
House GOP Leader Praises Mark Zuckerberg for Political Ads Policy

(Bloomberg) -- Facebook Inc. chief executive Mark Zuckerberg's decision not to ban political ads that Democrats say are inaccurate drew praise from the top Republican in the House of Representatives Friday.Minority Leader Kevin McCarthy, a California Republican, said he appreciated Zuckerberg's comments on Thursday that policing political speech would be undemocratic."The idea of banning speech you might not like is nonsense, but sadly the mindset is creeping into places like college campuses and our presidential campaign platforms," McCarthy told reporters. "Yesterday was a heartwarming reminder that free expression is the best business model in the world."In recent weeks, the...

Mexico Throws $900 Million at Labor to Entice Democrats on USMCA
Mexico Throws $900 Million at Labor to Entice Democrats on USMCA

(Bloomberg) -- Mexico's President Andres Manuel Lopez Obrador is pledging close to $1 billion to implement a law to improve labor conditions that U.S. Democrats say is key to passing a stalled North American trade accord.Mexico's Finance Ministry will ask lawmakers to boost the budget that was already presented to congress by $69 million for next year, Lopez Obrador stated in a letter he sent to U.S. Representative Richard Neal, chairman of the House Ways and Means Committee. He promised another $830 million over the following three years to fund the labor overhaul.The expensive pledges seem to be working, as both the White House and House Democrats are becoming increasingly upbeat about...

America
America's Coal Country Is Heading for Another Wave of Layoffs

(Bloomberg) -- The clearest sign yet that America's Coal County is headed for widespread job cuts: The amount of coal being produced per U.S. miner is at the lowest level in eight years.Productivity has slid 11% this year alone. The last time it was this low was in 2011, when coal companies ended up

Brexit Rally Eases as Traders Weigh Deal
Brexit Rally Eases as Traders Weigh Deal's Chances: Markets Wrap

(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. equity futures advanced with European stocks on Thursday and the pound strengthened as a new Brexit deal was announced, though moves eased as investors assessed its chances of winning crucial

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Tech

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.