Downgrading Apple On Rising China Geopolitical Risk: The Supply ...
Investors are growing concerned about Apple's Chinese revenues as China orders government agencies to ban iPhones at work. However, the bigger threat may be the majority of Apple products manufactured in China, making it difficult to diversify outside the country. Experts estimate it could take years or decades to move manufacturing out of China, impacting profit margins. Despite potential headwinds, the strength of Apple's ecosystem may offer support for the stock. However, the author expects the stock to underperform the market due to increasing risks.
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Frequently Asked Questions
Q: What is geopolitical risk?
A: Geopolitical risk refers to the potential impact of political events, actions, or conflicts on global markets and economies. It can cause volatility and uncertainty in financial markets.
Q: How does the rise of China contribute to geopolitical risk?
A: The rise of China is considered a significant geopolitical event with long-term implications. It can affect global markets and economies due to its economic size, political influence, and policies.
Q: How is global economic growth affected by geopolitical risk?
A: Global economic growth has recently been slowing amid uncertain and gloomy conditions. Geopolitical risk can create obstacles and uncertainties for businesses, trade, and investments, impacting global economic growth.
Q: Are there any sources for more information on geopolitical risk and global economic outlook?
A: Yes, you can refer to the following sources:
- J.P. Morgan Asset Management - Long-Term Capital Market Assumptions
- IMF - Global Economic Growth Slows Amid Gloomy and More Uncertain
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