Things didn’t look good this morning. When stock markets opened, Facebook was down 12.1 percent, Apple was down 10 percent, Google was down 6.5 percent, etc. But public tech companies are already recovering from this brutal drop, with Apple leading the way.
As of this writing, Apple is back in the green, up 0.19 percent compared to Friday’s closing price to $105.96. Other companies are slightly down, but nowhere near the level of this morning.
In an unusual move, Apple issued a mid-quarter update with some remarks from CEO Tim Cook. He sent an email to Jim Cramer:
It’s clear that Cook was looking to reassure shareholders after a difficult trading day in Asia and Europe — China had its worst trading day since 2007 and Europe followed suit. And that’s probably why Apple is up 11.3 percent compared to its opening price this morning.
Other companies are also benefiting from this regained confidence. Here’s a quick recap. Google is now down 1.5 percent to $603.20, Microsoft is down 1.7 percent to $42.34, Facebook (one of the most affected company this morning) is now only down 1.8 percent, Netflix is down 0.76 percent to $103.17, PayPal is near flat with 0.18 percent decrease to $34.19.
Other companies are still taking a hit, such as Amazon, trading down 3.78 percent to $475.78, or Twitter, trading down 3.94 percent to $24.85.
When I wrote my first post this morning after the opening bell rang, I wondered whether the stock markets would recover in the coming weeks. It looks like it could happen sooner than expected.
A bigger concern remains — the Chinese economy is showing clear signs of weakness. Many tech companies rely on the Chinese market to boost their growth, manufacture their goods and sell their products. Companies such as Google and Facebook shouldn’t be affected too much as their main websites as well as their advertising units are banned. But other companies should carefully evaluate the long-term risks in China for their product roadmaps.
Are we out of the woods? Not yet, but the woods aren’t on fire.