The G-20 Summit in Buenos Aires this Friday could ignite the comeback the stock market needs, according to CNBC’s “Mad Money” host Jim Cramer, especially if a meeting between U.S. President Donald Trump and China president Xi Jingping materializes into something positive.
Tech giant Apple, in particular, would like to see a favorable result from the meeting. The iPhone maker’s shares have already been depressed by a spate of analyst downgrades as the gloomy outlook for future sales dampened investor confidence with analysts citing higher unit prices as a futile attempt to curb the eventual loss in sales.
The tech giant’s shares got battered again when President Trump mulled the idea of a 10% tariff on iPhones and laptops imported from China.
“Maybe. Maybe. Depends on what the rate is,” said President Trump in an interview with The Wall Street Journal. “I mean, I can make it 10%, and people could stand that very easily.”
Shares of Apple are down just under 1% as of 1:15 p.m. ET, but have fallen just over 20% within the past month.
November’s early post-midterm election rally was short-lived as the volatility that roiled investors in October spilled over into November, prompting Jim Cramer to call it “one of the worst times in a long time.” The FANG (Facebook, Amazon, Netflix, Google-Alphabet) stocks have been on a downward spiral amid third-quarter earnings season, falling as much as 10% from their top-of-the-world 52-week highs.
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The other “FAANG” moniker that includes Apple have helped to fuel the decade-long bull run before a bevy of sell-offs in October, particularly within the technology sector, racked the capital markets. The volatility has racked investors’ nerves enough that any news from key government figures could trigger a sell-off.
“People are now starting to presume the worst,” said Cramer.
“We need to presume the worst out of anything from the White House or the Fed if we’re actually going to get an end to this bearish phase,” Cramer added.
Analysts are already forecasting that if a 10% tariff were to come into fruition, it would significantly impact Apple’s bottom line. Investment banking firm Baird calculated an impact of $0.25 to $0.30 to Apple’s earnings per share–numbers that would make the iPhone maker cringe.
“While we take the negative supply chain comments with the proverbial grain of salt, there’s little question that higher iPhone prices due to potential tariffs would likely negatively impact demand and profitability at some level,” said Baird analyst William Power.
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