The Apple EconomyApple is now the second most valuable stock in the world, after Exxon ( XOM), in terms of market capitalization. However, it remains by far the most influential stock in global stock markets, from a technical standpoint, when other factors are taken into account, such as index weightings and dollar-weighted trading volume.
In terms of fundamental impact, the importance of Apple goes well beyond its top ranking in terms of EPS weighting (about 5%) in the S&P 500. As Apple's earnings go, so too will the earnings of dozens of Apple suppliers. Cirrus' ( CRUS) earnings warning on April 17, and the resulting 15% stock price collapse, which was based on a decline in Apple orders for one of its product lines, is just one example of how the fate of Apple is inextricably linked with the fate of many companies in the stock market -- particularly those that comprise technology sector indices, such as the Nasdaq 100 and index ETFs such as PowerShares QQQ ( QQQ). In particular, the probable secular decline in Apple's profit margins in the next few quarters and years, due to increasing competition, a commoditization of its products will most likely be mirrored by shrinking profit margins by Apple suppliers.