• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Apple Falters in Pre-Market as Trade Pressures Poke Through Again

It's not deja vu as tariffs are taking Apple stock down once more, though analysts are eager to see the company's iPhone 11 line.
By KEVIN CURRAN Sep 03, 2019 | 08:57 AM EDT
Stocks quotes in this article: AAPL, SSNLF

Renewed trade tensions are taking an effect on Apple Inc. (AAPL) stock on Tuesday.

Shares of Cupertino, California-based Apple faded about 1% in trading before Tuesday's opening bell following the imposition of new 15% tariffs that will tag Apple products such as desktop computers, watches AirPods, headphones and home devices.

"This new tariff list taxes consumers on $52 billion worth of their favorite tech products, including TVs, digital cameras, Bluetooth earbuds, smartwatches and fitness trackers," Consumer Technology Association CEO Gary Shapiro said. "The president's decision to hike tariffs even higher means even more pain for American businesses, workers and families."

Shapiro said while the administration's aims regarding intellectual property theft and technology transfers are noble, the method by which President Trump is waging his war is hurting some of America's largest companies, including Apple.

"Continuous threats of more tariffs and occasional promises that trade talks are progressing mean whiplash for global stock markets,"Shapiro said. "That uncertainty hurts every American with a pension, retirement fund or college savings plan."

Notably absent from the new tariff list is Apple's iPhone, which has received a reprieve for now. The tariff on iPhones is currently delayed until Dec. 15, possibly aided by what President Trump called a "compelling argument" from Apple CEO Tim Cook about tariffs' competitive ramifications in the industry, particularly with regard to Apple's race with Samsung (SSNLF) for smartphone and 5G supremacy.

At the very least, the delay shows some flexibility on the trade front if consumer pain and stock market shocks do prove increasingly problematic.

Margin Mitigation

With time for the company to prepare for the iPhone tariff ahead of December, analysts have noted that Apple may be able to absorb the tariff rate on its flagship product because of declining memory prices, negating much of the necessity to either raise its prices or absorb the cost of trade taxes, which would hurt margins.

Faith in the company's ability to navigate the current environment is keeping investors on the side of Jim Cramer's oft-repeated "own, don't trade" thesis on the stock.

"All in all, this potential offset to tariffs represents another reason why we think investors should own this stock instead of trying to trade it on trade headlines," Cramer's Action Alerts PLUS team advised. Apple is a holding of Cramer's Action Alerts PLUS charitable trust.

Excitement Over iPhone 11

With the trade war tempering optimism, investors may be wise to watch stock movements ahead of some major announcements due next week.

On Sept. 10 Apple is set to unveil its iPhone 11 line, an important step in the ever-extended upgrade cycle ahead of the much-anticipated 5G shift.

"With Apple caught in the crossfire on the US/China trade battle over the last six months the company (and its investors) are highly anticipating this iPhone 11 slate of smartphones to stimulate demand especially in the key China region," Wedbush analyst Dan Ives said. "The main event of next week's launch will be the flagship iPhone 11 Pro and the iPhone 11 Pro Max as these smartphones represent the crux of improvements coming in this year's releases."

Ives added that traction in China will be crucial, as his firm estimates 60 million to 70 million Chinese consumers are due for an upgrade.

"With the US/China UFC battle and Huawei potential backlash making Apple the poster child for the trade war, this is a key hand holding time for the Street on the name," Ives said. "The installed base of Apple remains the golden jewel and key to the valuation and our bullish thesis with iPhone 11 representing a key opportunity to catalyze these consumers into their next iPhone."

An increasingly prominent services segment that includes likely large-scale spending on streaming services is set to dovetail off the upgrade cycle, with Ives suggesting the future is bright regardless of persistent headline risks.

"While China remains a wild card, we are bullish into Apple's future heading into FY20 and beyond," he concluded. "We maintain our OUTPERFORM rating and $245 price target."

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | Markets | Stocks | Consumer | Media | Music | Software & Services | Technology | Technology Hardware & Equipment | Telecommunications | China | Real Money | Analyst Actions | Stock of the Day

More from Stocks

Let's Shine a Light on Lucid Motors as It Slides Downhill

Brad Ginesin
Jul 2, 2022 1:00 PM EDT

LCID's market cap has been deflated, so is it now a bargain, or can it slip further?

Stop Wishing, Hoping and Praying and Take Control of Your Investing

James "Rev Shark" DePorre
Jul 2, 2022 10:00 AM EDT

The most powerful thing an investor can do is embrace the idea that they don't know what the future holds.

If You've Got Time, These Three Dividend Aristocrats Should Pay Off

Bob Ciura
Jul 2, 2022 7:30 AM EDT

There high-growth dividend stocks will be here over the long haul.

Welcome to Second Semester on Wall Street, Here's How to Make the Grade

Jim Collins
Jul 1, 2022 4:36 PM EDT

Think you can own big tech? You might just get an 'F' for that. Here's what will get you on the other side of this year.

We Got a Break, but the Heat Is Still On

James "Rev Shark" DePorre
Jul 1, 2022 4:22 PM EDT

A limited rally cooled some of the negativity on the market, but guess what's going to hit the fan soon?

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • 04:41 PM EDT PAUL PRICE

    First-Half Results - Putrid; Second Half Results - Likely to Be Much Better

    It's great that we're done with June. 2022 mark...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login