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'Flash Crash' as Apple Releases Revenue Warning - EMEA Brief 03 Jan

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  • US Index Futures fell and Asian shares toppled on Thursday after a revenue warning from Apple on its Q1 results adds to fears of slowing global growth. Dow futures point to a decline of over 400 points at the open. 
  • The Dow is currently trading at 23015, the S&P at 2476 and the Nasdaq at 6211. 
  • MSCI's Index of  Asia-Pacific shares excluding Japan dropped 0.6%, whilst the Nikkei futures fell 2.2%. 
  • The news from Apple sparked a 'flash crash' in the currency markets, sending the safer assets such as the Japanese Yen soaring against most other currencies, rising by as much as 3.7% to 104.87 against the USD. In contrast, the AUD toppled 3.5% to 0.6741 against the USD, its lowest level in a decade.
  • US crude rose 2.5% to settle at $46.54 yesterday, on the back of a fall in Saudi oil exports. 
  • Gold remains a safe haven for investors as it continues its rise amid a volatile global market, currently trading at $1290.01 an ounce. 

UK, US and Europe: Apple has shocked investors with a rare revenue warning on its Q1 results, wiping 8 percent from its share price in after-market trading. The news has stoked investor fears over the outlook for the global economy as trade tensions and weak company earnings hit the equities market hard in the latter half of 2018. The warning sparked a flash sell-off among most major currencies such as the US and the Australian dollar, resulting in a rise in the Japanese Yen as the currency is seen as a safe haven in times of uncertainty. Apple attributes the warning to disappointing iPhone and Apple Watch sales in China, blaming trade tensions and the country's recent economic weakness for the declining demand.

Looking ahead, we have the ADP Employment Change figure release at 1:15pm GMT and is expected to be a similar figure with last month, with the release of US Non-farm Payrolls tomorrow. The US manufacturing PMI is also set to come at 3pm GMT, forecast to be lower than the previous figure, indicating a possible industry contraction. 

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Tesla misses Wall Street estimates, delivering 90,700 vehicles in its fourth quarter last year. The car-maker is also cutting prices on all its models by $2000 to help offset a reduction in federal tax credits for electric car drivers. 
  • Apple shares drop 8% after its warning on Q1 results as the sales for its flagship product, the iPhone, disappoint.
  • Next's in-store sales fell 7% in its last quarter of 2018, however online sales were up by 14.9%.
  • Blake Nordstrom, co-president of the American chain of luxury department stores, Nordstrom, has died at the age of 58 after battle with cancer.

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