This week in the markets
- Consumer enthusiasm for Apple’s newest iPhone seems to be diminishing, which may have pushed down Apple’s stock price to a four-month low on Wednesday.
- High oil inventories caused oil prices to drop midweek to their lowest level in eight months.
- Wednesday, Bitcoin’s price fell more than 12%, proving it's still extremely volatile.
Apple’s stock hit a four-month low
Analysts are estimating that Apple will produce 6% fewer iPhones next year than previously expected, and this may have some investors worried. Shares of Apple fell 3% on Wednesday to a four-month low. A drop of 3% may not sound like much, but it was enough to take Apple’s market capitalization, which is the total market value of a company’s outstanding shares, below $900 billion. Remember, Apple had previously reached a $1 trillion market capitalization back in August. Apple announced that they would no longer report unit sales for the iPhone, iPad, or the Mac starting next quarter, which means investors can only guess how well some of Apple’s big-name products are doing. Don’t feel too sorry for the tech giant (or its investors); Apple stock is still up more than 10% for the year.
The Dow Jones Industrial Average (DJIA) also fell 0.81% at Wednesday’s close, in part due to Apple’s drop. This was the fourth straight day of losses for the DJIA and its longest consecutive decline since early August.
Apple is the top holding in the Vanguard S&P 500 ETF (VOO), as of 9/30/2018, which is part of many MoneyLion member portfolios. However, try not to worry too much about Apple’s stock price decrease. You’re also diversified among a number of carefully selected exchange-traded funds (ETFs) based on your risk preference. This diversification should help provide a cushion against individual stock declines.
High oil inventories push oil prices down
Oil prices fell on Wednesday, after domestic inventories rose by 5.8 million barrels in the last week, more than double what experts had expected. When oil inventories are up, like they are now, it can cause investors to question demand and push prices down. The most current increase caused the price of oil to drop to an eight-month low. US crude production also hit a record high of 11.6 million barrels per day.
Bitcoin proves it’s still a volatile investment
The popular cryptocurrency Bitcoin fell more than 12% to $5,400 on Wednesday, the lowest price it has seen in more than a year. Bitcoin’s plunge may be driven by news that Bitcoin Cash will be split into two, creating a separate cryptocurrency. The two versions create separate, competing versions of the blockchain, perhaps confusing users, dividing the power of the competing blockchains, and damaging the reputation of the cryptocurrency. Although Bitcoin and Bitcoin Cash are separate cryptocurrencies, such events can fuel volatility across crypto markets broadly.
At MoneyLion, we don’t recommend Bitcoin or any cryptocurrency as a wise investment at this time, because they currently tend to be very volatile. MoneyLion fine-tunes your asset allocation to fit your needs and risk tolerance according to the information you provide. We also periodically rebalance your portfolio, to help you stay on track to meet your financial goals.
And now for your weekly Lionomics wrap-up. 🤓
Lionomics: Finance made easy
This week, Lionomics taught you that the stock market experiences patterns or trends of up and down movements known as market cycles -- and they have three phases! With each cycle, the market tends to get pushed higher, and that’s why it’s important to be a patient investor and stay with the market through all its phases.
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