What do Apple, Boeing, Intel, AMD and Goldman Sachs all have have in common? They all say China and the global economy are weakening and getting worse.
From smartphones and semiconductors to financials, companies representing all corners of the stock market say they are worried more and more about macroeconomic issues hitting revenue.
“The CEO community that I’m talking to, which is our clientele, which is across all industry groups and all geographies, and most of our clients are global in nature so they’ve got businesses all over the world. They are clearly feeling some type of slowdown in their business,” Gary Cohn, president and COO of Goldman Sachs, told CNBC last Thursday, according to a transcript.
And nothing spooks investors more than when the most valuable company in the world confirms the global deterioration.
“We’re seeing extreme conditions unlike anything we have experienced before, just about everywhere we look,” Apple’s CEO, Tim Cook, said on the company’s earnings conference call Tuesday, according to a FactSet transcript.
Later in the call, Apple’s CFO, Luca Maestri, said: “The macroeconomic environment is weakening. When you think about all the, particularly all the commodity-driven economies, Brazil and Russia in emerging markets but also Canada, Australia in developed markets, clearly the economy is significantly weaker than a year ago.”
Moreover Apple’s vaunted business in China, which Cook last summer said was immune to the macro weakness, is faltering. The company’s sales growth in the country dramatically slowed from 99 percent year over year during the September quarter to 14 percent year over year during the December quarter. And it’s likely to decelerate further, according to management.
“We began to see some signs of economic softness in Greater China earlier this month, most notably in Hong Kong,” Cook said on the earnings call.
Recent deterioration in the world’s second-largest economy is spreading across the technology industry. Intel and AMD said themacro environment in China is noticeably slowing during their earnings announcements earlier in January.
Even aerospace and defense is not immune to a global slowdown.
Boeing gave tepid 2016 guidance Wednesday of $93 billion-$95 billion in sales versus the $97.3 billion FactSet Wall Street estimate, earnings per share of $8.15-$8.35 versus $9.41 consensus and commercial plane deliveries of 740-745, down from the 762 in 2015. The airplane manufacturer generates 58 percent of its revenue outside the U.S., according to FactSet.
Here are some stocks overly exposed to China and the globe. If Apple and these others are right, investors may want to avoid these stocks.