Apple sounds the alarm. Due to the corona virus outbreak, the cell phone manufacturer can no longer deliver its iPhones as usual. The supply bottleneck is only temporary, the US company said on Tuesday night. However, the failures can be felt worldwide. The negative consequences of the virus outbreak hit Apple with such force that the company has to overturn its sales forecast, which is only three weeks old.
The problems had already begun at Apple. The supplier Foxconn was forced to temporarily stop production in two important plants in China. In the meantime, the company has given the authorities the green light to restart the production of iPhones. However, this is difficult – simply because many employees have not yet returned to their jobs. Pegatron, another contract manufacturer for iPhones, also had to struggle with restrictions.
But the global delivery problems are not the only problem facing the technology group. In addition, there are losses in China itself, because many sales outlets there are closed or almost deserted because the Chinese still do not dare to take to the streets for fear of infection.
Exchanges go down, Franc continues to rise
Apple’s warning also upset investors on the stock exchange. In Asia and Europe, stocks sometimes lost significant value. “It’s a wake-up call from Apple to apparently carefree investors about the negative economic impact of the corona virus,” said a market analyst. In return, safe havens were required. The Swiss franc gained – one euro only cost CHF 1.06. The Swiss franc is thus stronger than it has been for years.
Apple is just one example that shows how the corona epidemic is affecting entire industries and sending shock waves around the world. Economic experts warn of the unforeseeable consequences of the epidemic, and fear is also spreading on the stock markets.
The Swiss banker Konrad Hummler, who gained fame with the often relevant investment comments before the collapse of the private bank Wegelin, warns with clear words. If the virus outbreak spreads to a worldwide pandemic, this could become the next “black swan” for the global economy and the stock markets, he notes in a written assessment of the situation. Because there are hardly any reserves left worldwide to deal with such a shock. The debt is already high, the central banks have exhausted themselves, and interest rate cuts are only of limited effectiveness. Hummler does not necessarily assume such a scenario – but he does estimate the probability of it to be 20 to 40 percent. He advises investors to protect themselves against this.
Corona virus also affects European economy
Germany, Switzerland’s most important trading partner, should also feel the effects of the epidemic. The chief economist of the Liechtenstein VP Bank Group, Thomas Gitzel, believes it is possible that the German economy will shrink slightly in the first three quarters of the year. «The corona virus is out of time. While an economic recovery was just beginning to emerge in the first quarter, it will be off the table in the short term, »he explained.
In Japan, the third largest economy in the world, the looming scenario of a recession is looming on the horizon after the economy slumped unusually strongly in the fourth quarter.
“The corona virus hits the world harder than Sars.”Economiesuisse chief economist Minsch
Despite the virus crisis, China itself does not want to be deterred from its economic growth targets this year. However, the rating agency Moody’s expects sales and profits to decline significantly across the country in the coming months – especially in the areas of transport, consumption, tourism and entertainment. Smaller Chinese companies in particular are at risk of running out of money due to a lack of orders. This in turn fuels the fear of mass layoffs.
Economiesuisse warns: Switzerland is also affected
The business association Economiesuisse is preparing for noticeable effects, also for Switzerland. “Various factors suggest that the current epidemic will have a greater impact on the global economy than Sars,” wrote chief economist Rudolf Minsch in a blog post.
The reason for this is the foreseeable slower economic growth in China, which will affect the whole world. Switzerland, too, cannot avoid it: in the meantime, many more Swiss companies are present in China than during the Sars crisis in 2002/03. “Around 1,000 branches of Swiss companies with their approximately 180,000 employees are waiting for the situation to normalize,” Minsch writes. But he doesn’t want to spread panic. A large part of the losses will only be temporary – provided that the crisis ends soon.
Significant signs of braking from Swiss companies
At many Swiss companies, the brake marks are slowly becoming visible. Dental implant manufacturer Straumann expects at least 30 million francs less sales in China in the first quarter, as it announced on Tuesday. The elevator manufacturer Schindler had also warned of potential sales losses of hundreds of millions of francs. The luxury goods manufacturers Swatch and Richemont are also likely to be severely affected; The Chinese are by far the most important customer group in the industry.
Created: 02/18/2020, 07:07 PM
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