Global Stock Markets React to Apple's Plunge, US Economic Indicators, and Currency Trends | Daily Market Analysis

Key events:

• Japan - GDP (QoQ) (Q2)
• Canada - Employment Change (Aug)
• Canada - Unemployment Rate (Aug)

On Thursday, global stock indices predominantly experienced declines, notably the S&P 500 and Nasdaq, which registered drops attributed to Apple's (NASDAQ: AAPL) performance. Concurrently, the US dollar gained ground following the release of US jobless claims data that fell short of expectations.

Surprisingly, initial claims for state unemployment benefits dipped to 216,000 in the week concluding on September 2nd, down from a revised figure of 229,000 in the preceding week. These figures marked the lowest weekly claims since February.

Additionally, a separate report indicated that US worker productivity in the second quarter did not exhibit the robustness initially reported.

Recent data consistently supports the notion that the US economy retains its resilience, potentially necessitating an extended period of elevated US interest rates.

Apple has recently experienced a staggering loss of approximately $200 billion, an impressive eleven-figure sum, in its market capitalization over just two days. This decline is attributed to reports indicating that China is imposing restrictions on the use of iPhones by state employees.

This setback had a ripple effect on the broader US technology sector, leading to a decline in its performance. Concurrently, shares of numerous significant Apple suppliers located in Asia also saw declines during Friday's trading. Notably, China represents a substantial market for Apple, accounting for nearly a fifth of the company's total revenue. Additionally, Apple and its suppliers provide employment to thousands of workers in the region.

This development unfolds just ahead of an eagerly anticipated Apple event scheduled for next week. During this event, the tech giant, valued at $2.78 trillion, is expected to unveil its new iPhone 15 lineup alongside innovative smartwatches.

The Dow Jones Industrial Average saw a modest increase of 57.54 points, equivalent to 0.17%, reaching a level of 34,500.73. Conversely, the S&P 500 experienced a decline of 14.34 points, representing a 0.32% decrease, settling at 4,451.14, while the Nasdaq Composite registered a more substantial drop of 123.64 points, or 0.89%, concluding at 13,748.83.

In addition to market movements, investors also absorbed comments from Federal Reserve Bank of New York President John Williams, who posed the question of whether monetary policy has reached a point where it might be sufficiently restrictive to restore economic equilibrium.

A recent Reuters poll conducted among forex strategists indicates that the dollar's strength is anticipated to present challenges for most major currencies as the year draws to a close. The persistent demand for the US currency has posed challenges for other currencies.

Over the course of this week, the euro has experienced a 0.5% decline and remained stable at $1.0715 during the Asian trading session. Investors are currently assessing that the European Central Bank is more inclined to maintain the status quo rather than implement an interest rate hike in the upcoming week.

Meanwhile, the Japanese yen has reached fresh lows not seen in ten months, currently trading at 147.19 per dollar. It is gradually approaching the 150 mark, where traders perceive a significant probability of government intervention to provide support and stabilize the currency.

In parallel, China's onshore yuan faced downward pressure, reaching a 16-year low against the US dollar. This depreciation can be attributed to a real estate downturn, sluggish consumer spending, and dwindling credit growth in the world's second-largest economy.

As European markets come to life, investors may face a volatile conclusion to the week, with futures signaling a mixed opening. The pan-European STOXX 600 index, in particular, has recorded losses for seven consecutive days, marking its most extended string of declines since February 2018, with futures for Eurostoxx 50 up 0.21%, and those for the German DAX up 0.18% and FTSE down 0.07%.

Furthermore, investor attention will be drawn to debt-ridden French supermarket retailer Casino following the announcement by market operator Euronext that the retailer will be excluded from Paris' SBF-120 equity index, which comprises major companies.