The broad markets traded lower by 1.5 percent Thursday after tech giant Apple, Inc. AAPL cut its guidance and said the ongoing U.S. trade war with China will be impacting is China business in 2019.
As the market digests the Apple news, one man says the Apple guidance cut is only the beginning.
'Not Just Apple'
President Trump’s economic advisor Kevin Hassett told CNN Thursday that the trade war will certainly hurt the Chinese business of U.S. companies like Apple.
"There are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded ... until we get a deal with China," Hassett said on CNN. "It's not going to be just Apple."
Hassett said that, while American companies are feeling the pain, China has a growing pressure to agree to a trade deal.
Business As Usual Soon?
Hassett said the recent slowdown in China’s economy is equivalent to a recession in the U.S. However, the disruptions to U.S. businesses that are rattling the market are only temporary, he said, and it will be back to business as usual once a deal is reached.
About a month ago, Hassett said the risk of an imminent U.S. recession is “very, very low.”
Investors don’t seem particularly convinced. Less than two days into 2018, the SPY ETF and the SPDR Dow Jones Industrial Average ETF DIA are already down another 1.4 percent and 1.8 percent, respectively, after both funds generated their largest losses in a decade in 2018.
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