Asian markets Friday continued the global sell-off triggered by Apple’s warning of lower revenues and futures indicators predict a sharply lower opening for U.S. markets.
The Tokyo market dropped 3 percent in morning trading, and markets in Shanghai, Sydney, Seoul and Taipei were also down.
Stock markets across the globe dropped Thursday after tech giant Apple said sales of its devices had fallen sharply in China last month, perhaps signaling a broader slowing in the world economy.
Apple has blamed U.S. President Donald Trump’s trade dispute with China for its shrinking outlook, but the U.S. leader tweeted his defense Thursday, claiming, “The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!”
US-China trade talks
On Friday China’s government said a U.S. trade delegation will visit Beijing next week for two days of talks on carrying out an agreement reached by Trump and Chinese President Xi Jinping to postpone new tariff hikes.
On Dec. 1 the two leaders agreed to complete talks about technology, intellectual property and cyber theft issues within 90 days, and hold off on new tariffs in the meantime. U.S. officials have said that if the talks fail to produce a satisfactory agreement Washington will increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.
Apple chief executive Tim Cook blamed the company’s sales shortfall on the trade battle President Donald Trump is waging against China.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote.
Not just Apple
Kevin Hassett, chairman of the White House Council of Economic Advisers, said the contentious U.S.-China relations will force other U.S. companies to cut their sales estimates in China.
“It’s not going to be just Apple,” Hassett told CNN. “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”
He said slowing consumer demand in China gives Trump an edge in ongoing trade negotiations.
“That puts a lot of pressure on China to make a deal,” he said. “If we have a successful negotiation with China then Apple’s sales and everybody else’s sales will recover.”
The U.S. economy remains strong, with the country’s 3.7 percent jobless rate at a nearly five-decade low. But economists say the U.S. economy could be slowing and uncertainty in global economic fortunes has led to volatile daily swings in stock indexes in recent weeks.
In 2018, U.S. stock indexes suffered their worst year in a decade, with most of the losses recorded in December. The Dow was off 5.6 percent for the year, with the broader Standard & Poor’s index of 500 stocks down 6.2 percent.