NASDAQ and other US indices continued to show sharp declines as a virus driven panic sell-off by investors continued this week as well. All of this, despite unprecedented measures by the US Federal reserve. Amid all the bloodshed that continues to happen, Apple lost its trillion dollar tag, with the share trading at $220 a pop, at the time of writing this piece.
The cupertino giant’s shares have fallen as much as 4% making Microsoft the only U.S stock with a value crossing a trillion. The fall, which began as soon as markets opened at 9:40 AM New York time, brought the previously trillion dollar company’s market value down to $960 billion.
One of the first companies to disclose the impact of the virus on their financials, Apple had announced that it would no longer meet its quarter guidance range of $63-67 billion. Manufacturers worldwide are struggling to manage the pandemic’s effects on their supply chains, which are massively China dependent. And just when things started to look slightly better in China, the coornavirus pandemic accelerated across the US and Europe at its fastest pace, shifting the epicentre from China to the west.
Earlier in the month, the company shut down offices and employees began teleworking much like their fellow tech giants. A few weeks ago, the company shut down all its stores outside Greater China in an effort to contain the spread of the pathogen while the company’s online site remained functional.
Apple shares have lost 25% this year as a result of the pandemic and subsequent reduction of business activity. Microsoft shares have dropped by 14% bringing the company’s value to $1.03 trillion, keeping it marginally above that golden line.
As stock markets globally drop dramatically, even investments such as gold in circumstances like these no longer remain a safe haven. The entirety of the world economy has taken a hit as purchases have gone down. Predictions from across the spectrum, project that the world GDP could be hit by as much as 30% with US and China most affected.
Banks have slashed their interest rates, Fed has brought its rates to 0 but has still not been able to cheer up investors. Today, after earlier cutting interest rates to near zero recently, the Fed announced that it will now lend against student loans and credit card loans, as well as back the purchase of corporate bonds and make direct loans to companies. And while all of this did send markets up by 3%, an alarmingly high rate of infections and continued lockdowns by multiple US states brought shares back to red. Another reason behind discouraging market sentiment is the inability of US politicians to show bipartisanship at this crucial juncture and pass a quick $1 trillion plus stimulus package.
Industries such as travel have been hard hit. Retail stores worldwide have closed down and travel bookings have completely collapsed. According to experts, the pandemic which has recorded 351705 cases globally, will send most countries into recession.
While it took 67 days from the first reported case to reach the first 100,000 cases of COVID-19, it took only 11 days for the second 100,000 cases, and just four days for the third 100,000 cases, WHO director-general Tedros Adhanom Ghebreyesus, said.