Respected market expert and trader Art Cashin warns that a recent report that Apple Inc. would cut its sales forecast for the iPhone X appeared to have "cast a shadow over everything."
Regarding the overall market, Cashin said it doesn't look "awe-inspiring."
To be sure, stocks have traded in a narrow range in lackluster holiday dealings.
"We'll see if they can shake that off and get started again here," Cashin told CNBC. "The negative news surrounding Apple cast a shadow over everything. Most of the tax, the Apple suppliers, etc., etc.," Cashin said.
Analysts have lowered iPhone X shipment projections for the first quarter of next year, citing signs of lackluster demand at the end of the holiday shopping season, Bloomberg reported.
Sinolink Securities Co. analyst Zhang Bin said in a report Monday that handset shipments in the period may be as low as 35 million, or 10 million, less than he previously estimated. "After the first wave of demand has been fulfilled, the market now worries that the high price of the iPhone X may weaken demand in the first quarter," Zhang wrote.
JL Warren Capital LLC said shipments will drop to 25 million units in the first quarter of 2018 from 30 million units in the fourth quarter, citing reduced orders at some Apple suppliers. The drop reflects “weak demand because of the iPhone X’s high price point and a lack of interesting innovations,” the New York-based research firm said in note to clients Friday.
"Bad news here is that highly publicized and promoted X did not boost the global demand for iPhone X," according to the note.
Apple has been counting on a redesigned 10th anniversary iPhone to boost shipments as its market value advances toward $1 trillion. The Cupertino, California-based company is facing new challenges from Samsung Electronics Co., which is quickly recovering from the Galaxy Note 7’s recall after fires. In the meantime, Chinese brands such as Huawei, Oppo and Xiaomi are also luring away potential customers in China and other emerging markets such as India.
Otherwise, Cashin said the market doesn't look "awe-inspiring."
"We're still waiting to see if the Santa Claus rally can get started," said Cashin, UBS' director of floor operations at the New York Stock Exchange.
To be sure, U.S. stocks were little changed on Wednesday, as gains in the technology sector offset losses in energy and helped keep major indexes nearly flat.
Trading volumes remained muted in the holiday-shortened week between Christmas and New Year. Trading on Tuesday marked the thinnest volume of the year for a full session, Reuters reported.
“We don’t see the behaviors typical of theme changes so we think this messiness in December is just temporary; the leadership of the year will resume and continue into 2018,” said Craig Callahan, President of ICON Funds in Denver.
“Technology, for example, led but we don’t see them as overpriced.”
(Newsmax wire services contributed to this report).
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