Good morning!

The following section was written by Graham Neary:

Continuing our China theme from yesterday, I note that Apple (US:AAPL) has blamed an "economic deceleration, particularly in Greater China" as its Q1 revenues are expected to come in 8% lower than the forecast it made only two months ago.

There are multiple layers to this story.

As many of you will have heard, the CFO of Apple's Chinese rival, Huawei, is currently on bail in Canada while the US seeks her extradition over alleged dealings with Iran.

This comes as Huawei is now beating Apple into second place in global smartphone sales for the first time.

There can be little doubt that US-China relations have frostened. Zero Hedge reckons that Apple is "indirectly accusing China of boycotting Apple products".

It's a grim situation and Apple's market cap is still so big ($700 billion) that it can seriously affect the US stock indexes, whose sentiment then leaks over to the UK indexes. The NASDAQ is down more than 2% in after-hours trading and FTSE futures look set to open in the red tomorrow.

Maybe not such a good morning after all!

End of Graham's section

The rest of today's report is written by Paul Scott:

Good morning! Haha, I see Graham got the date wrong, and originally put in 2018! I've corrected it now to 2019. Great to see that it's not only me who struggles with date changes.

Graham has passed me the reins. I hope we haven't confused too many people by sharing the report writing today.

Happy New Year to everyone! Let's hope the markets are a little more kind to us in 2019 than they have been in the last few months.

Just to reiterate, neither Graham or myself are traders. We tend to pick stocks we think are good, and take long-term positions in them. From time to time, some of those shares will go wrong. Over time though, the trajectory should be upwards. We're not trying to time the markets, that's not what we do.

I just thought it would be useful to clarify all this, given the comments last week from a reader who helpfully, and kindly, pointed out that my portfolio is not doing terribly well at the moment. With friends like that .... !

On to today's news.

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