Equities lost more steam this week as President Trump hinted at more tariffs towards China. On top of the $200 billion in goods the Trump administration is preparing, there is now discussion of another $267 billion worth of tariffs that could be imposed on Chinese goods.
The news sent stocks falling Friday. The Dow Jones Industrial Average, which rebounded from its intraday low, closed the week down 79.33 points to 25,916.54. Meanwhile, both the S&P 500 Index and the Nasdaq Composite Index logged their fourth straight day of declines, losing 6.37 points and 20.18 points, respectively. The technology sector as among the major decliners as Microsoft (MSFT) lost 3% for the week, while Google parent Alphabet (GOOG , GOOGL) and Facebook (FB) shed 4.4% and 7%, respectively.
Opportunistic investors want to know whether escalating trade tensions and if the fear of the potential impact is a buying opportunity. Buying on the dips could work very well here, especially as these declines come on a heels of an impressive jobs report. What’s more, next week brings tons of catalysts to get investors excited about the last quarter of the year.
For starters, there’s Apple’s (AAPL) iPhone launch event, which many are touting as the biggest iPhone release ever. The event kicks off Sept. 12 at the Steve Jobs Theater — the company's Apple Park campus in Cupertino. A long list of product refreshes are expected to be on the menu, including new iPhones that sport sizes of 6.5-inch and 6.1-inch.
These new models are expected to sport the names iPhone XS, iPhone X Plus, iPhone 9 and iPhone XS Max. They would be in addition to the current second-generation 5.8-inch model iPhone. Apple is also expected to release a fourth-generation Apple Watch. In additions to a long-rumored MacBook Air replacement, the company is rumored to unveil the first-ever iPad with Face ID.
Of course, these are just rumors and Apple has yet to officially announced details of the event, but if we are to follow the blueprint from last year, these predictions — many of which have been reported upon from leaks obtained by 9to5Mac — have been pretty spot on
But before we get to Apple’s Wednesday event, the market may be discussing the rumored exit of Jack Ma, co-founder and executive chairman of Alibaba (BABA). According to the New York Times, Ma — China's richest man — could step down from the company as early as Monday. Among candidate who can possibly fill Ma’s void is Alibaba’s current CEO Daniel Zhang. Ma, who helped launch the Chinese e-commerce giant two decades ago, turns 54 years old on Monday.
Is it possible that the market sensed that this news was coming? Alibaba stock had gotten punished this year, especially over the past three months as it has lost 21% of its value. Finding his successor could put a much-needed floor on the stock. Plus, with Amazon's (AMZN) recent ascension towards $1T market cap, Alibaba — the Chinese version of Amazon — could emerge a favorite among bounce-back candidates for 2019.
This week, investors will also focus on the earnings to gauge the continued strength of corporate profits. One stock worth mentioning is Adobe (ADBE), which reports third quarter fiscal 2018 results on Thursday. Wall Street expects the company to earn $1.69 per share on revenue of $2.25 billion. This compares to the year-ago quarter when earnings came came to$1.78 per share on revenue of $1.84 billion.
What to Watch: The company’s Creative Cloud segments is witnessing better-than-expected subscription adoption among government and educational institutions. For the shares to continue their strong momentum run, the software giant on Thursday must deliver a top- and bottom-line beat, while issuing confident guidance.