The equity market rally took a pause.

Technology stocks made the stocks fall on Tuesday as traders pare back the odds of massive rate cuts. This is because of a rising Treasury yield and a spike in VIX, which reflects heightened volatility and downward pressure on stocks.

There were some corporate news that drove sentiments.

🎲Apple’s downgrade hit the market.🎯

Barclay downgraded Apple on the concern that it is losing its iPhone market share, accounting for about half of the company’s revenue.

This bodes poorly for the company as investors are concerned that other products such as Apple Watch, AirPods, and accessories, including service performance, could be impacted. After all, Apple products are all about the ecosystem.

There is doubt about the performance of the iPhone 15, and that fear is translated into the possibility of weak demand for the iPhone 16, which is expected to be released in the fall. The analyst from Barclay also noted possible weak demand in other product categories, such as the Mac, iPad and wearables. Most critically, they expect that the services business growth is likely to be at most 10% this year.

🍎Falling market shares for the premium category.🔑

It comes at a challenging time for Apple, where the macroeconomic environment in China has not improved substantially while it has to fence off competition from domestic brands such as Huawei.

According to a finding by Counterpoint Research, Apple’s dominant share in the premium smartphone category has fallen from 75% to 71%. In comparison, Samsung increased 1% from 16% to 17%, with improvement seen in Huawei, jumping 2% in market share to hit 5%.

So, where is the growth for the day? It’s the value stocks. They are flourishing during the trading days while growth stocks like those in the technology took the beating, reversing a preference seen in 2023.

📖What’s on the menu today? 🥁

At 11 pm, we will receive the ISM manufacturing PMI and Process for Dec. At the same time, the JOLTs Job opening for November will be released, which will be critical for us to see if the Fed is correct that the labour market could cool off, with its lag effects of monetary tightening policy.

It is on 3 Jan, Wednesday, 9 am in Singapore and 9 pm in New York. Markets are likely to stay volatile for the first two weeks as we have major economic data release.

We hope you have a splendid journey to work and in school.

Cheers.