Home Business News Apple takes a bite of the metaverse as markets are still troubled by inflation and rate hike questions

Apple takes a bite of the metaverse as markets are still troubled by inflation and rate hike questions

by LLB Editor
6th Jun 23 11:14 am

Investors are happily betting that Apple can make the kind of success out of its foray into the metaverse that it did with the smart phone and a slew of other gadgets now pre-fixed with the ubiquitous ‘i’.

Even before the hotly anticipated ‘mixed reality’ headset is unveiled as more than just arumour, shares in the tech giant soared to record heights.

With a backdrop of inflationary pressures and consumer caution any new product will be seen as a way to shore up revenues at a time people might be reluctant to upgrade tech they already have.

AJ Bell’s Danni Hewson said: “What’s fascinating though is the expectation that Apple’s brand of magic can breathe new life into the rather stalled metaverse, and its share price movements today have dragged Meta along for the ride.

“Can Apple really ignite the excitement that so far has only really been felt from Mark Zuckerberg? As of yet it feels like an excitement that investors haven’t really understood or accepted.

“Though Apple has a knack for taking aproduct and somehow lifting it to another level, certainly in terms of public perception, and there’s an expectation that if Apple has chosen this bit of kit as their first new product in almost a decade, then there must be a really good business case behind it.

“But whilst investors are keeping one eye on the new, they’re also finding themselves stuck in the ever-present inflationary muck.

“Saudi Arabi’s decision to cut output from next month has rekindled concern that the oil price will remain artificially elevated – something airline bosses, governments and central bankers will be considering today.

“Fuel plays such a huge part in the inflationary environment that the current chess game being played is cause for concern in inflation-weary western countries.

“And the impact of controlling inflation by rising rates is causing ever increasing strain on households, particularly those with a mortgage up for renewal or buyers trying to step on the first rung of ladder.

“Caution is the watchword of the moment and the ECB’s Christine Lagarde won’t be alone in having doubts about whether underlying inflation has really peaked across Europe.

“What is clear is she’s carefully laying the groundwork for the ECB’s next rate hike, a hike which is all but nailed on in the UK but remains in question in the US.”

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