Weekly Key Insights: Apple Earnings and Yen Interventions
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Apple Earnings: New Horizons on the Horizon
Apple shares soared, breaking free from the shackles of a sluggish period, as the tech behemoth unveiled better-than-anticipated sales figures for the last quarter. Optimism spread like wildfire, fueled by Apple's promising forecast of a growth resurgence in the current period. It seems the era of stagnation is slowly dissipating.
In recent times, Apple has faced a slump in sales due to a dearth of groundbreaking innovations. However, all that is about to change. Brace yourself for May 7th, the day Apple plans to unleash a wave of excitement with the debut of its long-awaited and much-anticipated new iPads. It's been a year and a half since the company last refreshed its tablet line, and fans are eagerly anticipating the unveiling.
Surprisingly, Apple's results in China were even more impressive than expected. Despite a slight dip compared to the previous year, the company raked in a whopping $16.4 billion in revenue from the Chinese market last quarter. This figure comfortably exceeded analysts' predictions of $15.9 billion.
While Apple's product lineup is diverse, the real cash cow remains the iconic iPhone, single-handedly responsible for nearly half of the company's sales. In the second quarter alone, the beloved device generated a staggering $46 billion in revenue, surpassing estimates by a whisker at $45.8 billion. The iPhone's unwavering popularity continues to propel Apple to new heights.
But that's not all. Apple has just unleashed a financial bombshell by announcing its intention to embark on the largest share repurchase program in US history. The company's board gave the green light for an additional $110 billion in buybacks, surpassing its own record set back in 2018 when it authorized $100 billion in repurchases. Apple is flexing its financial muscle, signaling confidence in its future prospects.
Japanese Yen Intervention: A Dance of Currencies
The speculation surrounding Japanese yen intervention ignited like a wildfire on Monday, as USDJPY swiftly plummeted from the 160 levels to 155. With thin trading exacerbating the volatility, the absence of Japan markets due to a public holiday heightened the impact of these movements. Yet, all eyes soon shifted to the other side of the coin—the US Dollar drivers—after the FOMC policy meeting.
However, the spotlight quickly returned to Japan, stealing the show once again, as USDJPY took another sharp nosedive from the 158 level to approximately 153 late on Wednesday night. While authorities have refrained from confirming any intervention, the accounts from the Bank of Japan suggest they likely stepped in. Their silence may hint that they are not yet finished...
Let's not forget the past. In October 2022, Japanese authorities intervened two consecutive days in a row, leaving traders on edge. This week has already witnessed two "suspected" moves, and it would be wise to remain on high alert for more. With Japan currently observing a 4-day weekend, liquidity may be impacted, offering the Japanese authorities greater leverage for any potential intervention. Any signs of strength in the dollar will undoubtedly raise intervention alarms.
Fortunately, the recent weak Non-Farm Payrolls data has alleviated some of the tension as the Greenback stumbles. Support at 150.80 is being put to the test, and a breakthrough could expose the 150-handle. Should another round of intervention occur, USDJPY might find itself edging closer to 149. Meanwhile, any triggers that prompt US hawks to rekindle their fervor could reignite the carry trade, propelling USDJPY to new heights. Stay tuned for a thrilling currency dance!
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Disclaimer: This article constitutes the author’s personal views and is for entertainment and educational purposes only. It is not to be construed as financial advice in any form. Please do your own research and seek advice from a qualified financial advisor. From time to time, I have positions in all or some of the mentioned stocks when publishing this article. This is a disclosure - not a recommendation to buy or sell stocks.