U.S. stocks seen opening in the red
U.S. stock markets are expected to fall at the opening bell on Friday after President Donald Trump said he could slap China with fresh tariffs over its handling of the COVID-19 pandemic.
Speaking to reporters at the White House on Thursday, Trump said he had seen evidence linking a laboratory in the Chinese city of Wuhan to the virus.
“We signed a trade deal where they’re supposed to buy, and they’ve been buying a lot, actually. But that now becomes secondary to what took place with the virus. The virus situation is just not acceptable,” the president said.
Although his administration is not considering halting debt payment obligations to China as a way to punish the communist regime, Trump told reporters he could “do the same thing, for even more money, just by putting on tariffs.”
Analysts believe that a resumption of U.S.-China trade tensions would not be a good recipe for financial markets amid the ongoing COVID-19 crisis.
By 5:30 a.m. ET, the blue-chip Dow futures plunged 450.5 points, or 1.86% to 23,779.5. S&P 500 futures lost 57.12 points, or 1.97% to 2,845.38 while the tech-heavy Nasdaq 100 futures were down 225.38 points, or 2.51% to 8,763.12.
Apple Q2 revenue grows 1%; stock down premarket
Apple (NASDAQ: AAPL) shares were under pressure early Friday after the tech giant reported Q2 2020 revenue growth of 1% year-on-year, a clear sign that the pandemic has dented manufacturing and consumer demand.
In press release yesterday evening, Apple said revenue in the three months ended March 28 totaled $58.31 billion, up 1% from the $58.02 billion reported in the same period a year ago. Profit came in at $11.25 billion, or $2.55 per share, down about 3% from last year.
On average, analysts expected the iPhone maker to announce adjusted earnings of $2.26 per share on revenue of $54.54 billion, according to Refinitiv.
iPhone revenue dropped from $31 billion in the prior-year quarter to $29 billion. Revenue from its services and wearables business stood at $19.63 billion, up 18%.
Apple withheld guidance for the current quarter, citing market uncertainties related to the pandemic. As of writing, the stock was down $9 or 3.06% to $284.8 apiece in premarket trade.
Amazon shares tumble as Q1 profit falls 29%; Bezos tells shareholders to ‘take a seat’
Amazon.com (NASDAQ: AMZN) shares also slumped in premarket trade after the online retail behemoth posted disappointing first-quarter earnings late Thursday, and warned it might lose money in the current quarter as it burns cash on safety measures for its employees and other measures relating to the pandemic.
The company said its revenues rose 26% in the March quarter to $75.5 billion, as people forced to remain at home due to the pandemic turned to it for deliveries of essentials. However, earnings dropped 29% from the same period last year to $2.5 billion, or $5.01 per share.
Analysts polled by Refinitiv had called for adjusted earnings of $6.25 per share on revenue of $73.61 billion.
“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” CEO Jeff Bezos warned in the company’s earnings statement.
“But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses, getting products to customers, and keeping employees safe,” Bezos added.
Amazon shares were down $133.69, or 5.4% to $2,340.31 each in premarket trade.
