What's behind Apple's struggles? 17/01/2025

HOT stories for today
 

What's behind Apple's struggles?
 

• Apple (AAPL) shares fell 4% on Thursday, the steepest single-day drop since August 5. This was due to reports of weak iPhone sales in China and challenges with its artificial intelligence efforts. The stock is now down nearly 12% from its December peak, making it the worst-performing among the seven largest tech companies in 2025.
• Market research firm Canalys reported that Apple fell to third place in China’s smartphone market in 2024, capturing 15% of the 284 million phones sold, a 17% annual decline. Meanwhile, TSMC (TSM), a key Apple supplier, forecast a 6% drop in Q1 smartphone chip sales, citing seasonality. AI chips overtook smartphones as its largest revenue driver. Notable analyst Ming-Chi Kuo projected a 6% decline in iPhone shipments for the first half of 2025, attributing weak demand to the limited impact of Apple Intelligence, the company’s AI system, unavailable in China. Apple will report its December quarter earnings on January 30 as investors await clarity on its challenges.

 
 
 
Stocks on the move:       

• UnitedHealth Group (UNH): Shares dipped 6% after the company’s fourth-quarter revenue came in at $100.81 billion, missing analysts’ expectations of $101.76 billion, according to LSEG.
• Morgan Stanley (MS): The stock rallied 4% after the bank reported fourth-quarter results that exceeded Wall Street estimates, driven by a 29% surge in investment banking revenue.
• First Solar (FSLR): Shares rose 2.2% after Seaport upgraded the stock to buy from neutral, citing its strong risk-reward profile and status as one of the “few established blue chips” in the solar sector.
• Target (TGT): The retailer’s stock slipped nearly 1% after raising its fourth-quarter comparable sales guidance but leaving its profit outlook unchanged, suggesting deals drove shopper interest.
• Taiwan Semiconductor Manufacturing (TSM): Shares climbed 3.9% after the company raised its revenue guidance for the current quarter to a range of $25 billion to $25.8 billion, surpassing analysts’ expectations of $24.6 billion, according to FactSet.

 
Today’s action

• Asia-Pacific markets traded mixed on Friday as investors assessed a series of economic indicators from China. The country’s economy grew by 5% year-on-year in 2024, with fourth-quarter GDP surpassing expectations at 5.4% growth. December retail sales rose 3.7%, exceeding Reuters’ forecast of 3.5%, while industrial output expanded 6.2%, outpacing the expected 5.4%.
• U.S. stock futures ticked higher early Friday after the Dow Jones Industrial Average and the S&P 500 broke a three-day losing streak. Dow futures added 55 points (0.13%), while S&P 500 and Nasdaq 100 futures gained 0.18% and 0.2%, respectively. J.B. Hunt Transport Services (JBHT) fell 10% in extended trading after missing fourth-quarter earnings expectations. Ahead of Friday's market open, more bank earnings are anticipated, with reports from State Street (STT), Citizens Financial (CFG), Truist Financial (TFC), and Regions Financial (RF). Additionally, traders monitor housing data, including building permits and housing starts. Markets are preparing for President-elect Donald Trump’s inauguration on January 20, a U.S. bank holiday with markets closed.

Wahtclist: JBHT, AAPL, STT, RF, FAST, SLB, TFC, WIT

 

Bitcoin
 

• Bitcoin (BTC) briefly surpassed $100,000 for the fourth time on Wednesday, with trader sentiment shifting to greed as prices fluctuated between $90,000 and six figures. Analysts suggest the U.S. presidential inauguration on January 20 could catalyze for bitcoin to break out of its current range. Despite the milestone, bitcoin has struggled to sustain its highs, following an all-time peak of $108,000 on December 17. The cryptocurrency has since formed a series of lower highs, mirroring the seven-month consolidation seen in 2024.
• A key factor influencing market dynamics is leverage, as measured by futures open interest (OI), which reflects the total outstanding bitcoin futures contracts. Coinglass data shows OI dropped to 621,000 BTC ($61.6 billion) from 700,000 BTC on December 19, marking its lowest level since November when Donald Trump won the U.S. election. The decline in OI indicates that recent price movements are driven more by spot trading than leverage, suggesting a healthier market structure as bitcoin navigates its consolidation phase.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 3000-3800, Solana: 160-220

Forex

• EUR/USD trades near 1.0290 during Friday’s early European session, weighed down by expectations of gradual rate cuts from the European Central Bank (ECB). The Euro faces additional pressure as traders await the release of the Eurozone Current Account and Harmonized Index of Consumer Prices (HICP) later today. ECB board member Piero Cipollone will also deliver remarks that potentially influence sentiment.
• Meanwhile, the Japanese Yen (JPY) has eased slightly, trimming its substantial weekly gains against the U.S. Dollar. The USD/JPY pair recovered over 50 pips from below 155.00, a one-month low. However, further JPY depreciation remains limited by rising expectations of another Bank of Japan (BoJ) rate hike next week. Comments from BoJ Governor Kazuo Ueda and Deputy Governor Ryozo Himino earlier this week bolstered these forecasts, providing continued support for the safe-haven currency. Lingering uncertainty around U.S. fiscal and monetary policies under President-elect Donald Trump and easing inflation has dampened expectations for aggressive Fed rate cuts, adding complexity to the USD’s outlook.
  Watchlist: EUR/USD: 1.0200-1.0460, USD/JPY: 155-158.50

Basic Materials

• West Texas Intermediate (WTI) crude oil trades near $77.85 during Friday’s early Asian session, losing traction as maritime security officials anticipate a halt to Houthi shipping attacks in the Red Sea following the Israel-Hamas ceasefire agreement. Despite this, expectations of rising oil demand during the Lunar New Year may provide support for WTI prices.
• Gold (XAU/USD) remains steady around $2,715, close to its one-month high, amid growing bets on additional Federal Reserve rate cuts. Softer U.S. inflation data has pushed Treasury yields and the U.S. Dollar lower, further bolstering the non-yielding precious metal. However, the Israel-Hamas ceasefire has tempered bullish momentum, prompting gold to consolidate gains in a narrow range.
  Watchlist: GOLD 2600-2750, US Oil: 70.00-78.00

Key Economic Events Today:

EST time:

02:00 am: GBP Retail sales
05:00 am: EUR Final Core CPI
08:30 am: USD Building Permits, Housing starts
09:15 am: USD Industrial Production

BMO (Before the US Market opens)

TFC      Truist Financial Corp  
SLB       Schlumberger N.V.
FAST     Fastenal Company
STT       State Street Corp.
RF         Regions Financial Corp.

AMC (After the US Market closes): enjoy your weekend

The TEFS Analyst team wishes you a successful day!