Jan 4, 2019

China is the newest corporate scapegoat

Illustration: Rebecca Zisser/Axios

Earnings rise and earnings fall, but one thing remains constant: The downside is almost always somebody else's fault.

The bottom line: It's China's turn in the scapegoat spotlight.

  • For many years coming out of the financial crisis, fingers were pointed at "political uncertainty," even though folks pretty much knew what they were going to get from President Obama (both before and after he got a Republican Congress).
  • Then there was Brexit and then U.S.-everybody trade tensions, as Axios' Courtenay Brown detailed in October.
  • Big storms and other extreme weather often get used as excuses, as if corporate America can only plan for 70 degrees and sunny.

Now it's going to be China.

Apple kicked off the coming wave on Wednesday night, blaming China's slowed economy for a big fourth quarter revenue miss. Never mind that the smartphone market was already known to be saturated or that Apple still hasn't nailed a big new product category since Tim Cook took over (unless you count the watch).

Nope, it's all about China — causing others to freak out via a (not entirely implausible) thesis that Apple's economic insights into the country are more trustworthy than the government's official data.

  • Such things have a way of feeding on themselves, eventually trickling down from the public markets into the private markets (where valuations are already under pressure, but where relatively few U.S. companies have near-term China growth plans).

The bottom line: Whether or not Apple is right about China's faster-than-expected economic deceleration or just playing its traditional role of outlier, others will seize on it to explain their own shortcomings. After all, if it's good enough for Apple, it's certainly good enough for us.

  • It's the iScapegoat, a perfect patsy for any troubles that may await in 2019.

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 p.m. ET: 766,336 — Total deaths: 36,873 — Total recoveries: 160,001.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 3 p.m. ET: 153,246 — Total deaths: 2,828 — Total recoveries: 5,545.
  3. Federal government latest: The White House will extend its social distancing guidelines until April 30 — Rep. Nydia Velázquez diagnosed with "presumed" coronavirus infection.
  4. State updates: Virginia and Maryland issued stay-at-home orders to residents, joining 28 other states — Florida megachurch pastor arrested for refusing to call off mass services.
  5. World updates: Italy reports 1,590 recoveries from the virus, its highest ever.
  6. In photos: Navy hospital ship arrives in Manhattan
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Cuomo: Engaging in politics during coronavirus crisis is "anti-American"

New York Gov. Andrew Cuomo said during a Monday press briefing that he won't get into a political tussle with President Trump — calling it "counterproductive" and "anti-American" — as his state deals with the most confirmed coronavirus cases in the country.

The backdrop: Trump said during an appearance on "Fox & Friends" earlier Monday that Cuomo has received high polling numbers during the outbreak because New York has received federal aid.

Maryland and Virginia issue coronavirus stay-at-home orders

Data: Axios reporting; Map: Danielle Alberti/Axios

Maryland Gov. Larry Hogan and Virginia Gov. Ralph Northam issued stay-at-home orders on Monday, with exceptions for residents engaged in essential services, including health care and government functions.

The big picture: The states are the latest to announce policies to enforce social distancing, which have affected almost 250 million Americans. More than 1.5 billion people worldwide had been asked to stay home as of last week.

Go deeperArrowUpdated 3 hours ago - Health