Sharechat Logo

While you were sleeping: Apple soars, bucks trend

Tuesday 18th September 2012

Text too small?

Last week's rally proved a little too hard to sustain at the start of the week as investors reassessed equity valuations near five-year highs. Still, shares of Apple were deemed to contain plenty of value as iPhone 5 sales already set records.

US economic data were disappointing, providing little incentive to commit fresh funds on Wall Street. Factory activity in New York state shrank for a second straight month in September, according to a report from the Federal Reserve Bank of New York.

A separate report suggests the uncertainty itself has hurt economic activity, pushing the US jobless rate higher than it would have been in times of higher confidence, according to San Francisco Fed research advisors Sylvain Leduc and Zheng Liu.

"Our model estimates that uncertainty has pushed up the US unemployment rate by between one and two percentage points since the start of the financial crisis in 2008," Leduc and Liu write. "To put this in perspective, had there been no increase in uncertainty in the past four years, the unemployment rate would have been closer to 6 percent or 7 percent than to the 8 percent to 9 percent actually registered."

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.33 percent, the Standard & Poor's 500 shed 0.44 percent, while the Nasdaq Composite Index declined 0.36 percent.

And in Europe, the Stoxx 600 Index ended the day with a 0.3 percent slide from the previous close. National benchmark stock indexes in Germany, France and the UK moved lower, too.

"Everyone is still reeling from last week -- that is part of it," Stephen Massocca, managing director at Wedbush Morgan in San Francisco, told Reuters. "But on the other hand, it starts to become increasingly more difficult to pull the trigger on buy orders at these valuations."

The hesitation about equity valuations supported US Treasuries. The 30-year bond yield fell six basis points to 3.03 percent in New York, according to Bloomberg Bond Trader prices. The 10-year yield fell three basis points to 1.83 percent after rising 20 basis points last week.

Shares of Apple bucked the general trend, rising to a record US$699.54 earlier in the session, after the company said advance sales of its iPhone 5 surpassed 2 million units in one day.

Meanwhile, tensions between Japan and China over the territorial rights to a group of islands risk serious economic implications as Asia's largest economies are already battling a slowdown.

The worst diplomatic crisis between the two countries since 2005 might hurt a trade relationship that's tripled in the past decade to more than US$340 billion, according to Bloomberg.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar stalls amid doubts on US-China trade deal
Tourist numbers perk up in August as Aussies more than offset declining Asian demand
Peters to unions: strikes not helpful; no word on Fair Pay Agreements
Oil and gas critical to global emissions reduction effort - BP
Ebos pays A$34m for medical devices businesses
House price inflation ticks higher as sales volumes recover
Fletcher in $31 mln dispute with ministry over Greymouth hospital
NZ dollar eases as markets fret about US-China trade talks
15th October 2019 Morning Report
CTU pressures govt for Fair Pay Agreements

IRG See IRG research reports