Inside Apple's Selloff... Were You Prepared For The #Quad4 Hurricane?  - 11.19.2018 Quad 4 cartoon

The mainstream media is freaking out about the shellacking Tech giants like Apple (AAPL) are taking today. Shares of the $688 billion smartphone maker are down -8% on the day.

Apparently, everyone is just waking up to the emerging reality of global growth slowing. Here are some headlines:

  • CNBC: Gold rises to highest since mid-2018 on global growth woes
  • New York Times: Apple's glum news about China Sales sends stocks lower
  • Yahoo Finance: Apple just confirmed the stock market's biggest fear

Inside Apple's Selloff... Were You Prepared For The #Quad4 Hurricane?  - sector2

Our Macro team has been all over the weakness of global economic growth and the impact it would have on financial markets. In addition to warning about the weakness of Emerging Markets in January ahead of the 2018 selloff, we got bearish on U.S. equities in September, with short Technology (XLK) stocks among our top calls.

Here are four themes that are currently driving financial markets (and that we've been warning subscribers about for a while now):

  • #CyclicalPeaks (in earnings)
  • #StrongDollar
  • #ShortEM
  • #ChinaSlowing

Now, check out Apple CEO Tim Cook's letter to the company's investors. It reads almost perfectly like the Hedgeye Macro playbook. Here are a few direct quotes from Cook's letter:

  • #CyclicalPeaks: "We expect the number of shares used in computing diluted EPS to be approximately 4.77 billion. Based on these estimates, our revenue will be lower than our original guidance for the quarter, with other items remaining broadly in line with our guidance."
  • #StrongDollar: "We knew the strong US dollar would create foreign exchange headwinds and forecasted this would reduce our revenue growth by about 200 basis points as compared to the previous year."
  • #ShortEM: "We expected economic weakness in some emerging markets. This turned out to have a significantly greater impact than we had projected."
  • #ChinaSlowing: "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad. China’s economy began to slow in the second half of 2018. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years."

If you want to learn more about our market call...

Check out the 53-minute webcast below from November, "Webcast [Replay] | Quad 4: The Worst Is Yet To Come."