Welcome to CrushTheStreet.com’s Weekly Market Wrap-Up!
Our top news item is the massive security breach of Apple’s digital cloud network, which has led to an embarrassing public fall-out for Steve Jobs’ once universally loved company. Earlier in the week, online hackers caused an uproar when it was rumored that several personal photographs of A-list celebrities, including those of a risqué nature, were hijacked and subsequently uploaded onto the web.
Those fears were later confirmed when Apple admitted that some of their members’ private information was illegally accessed, although the tech-giant was adamant in deflecting blame from their iCloud network, denying any structural compromise and only offering that the company could have done a better job of protecting their customers.
That may not sit well with those affected, which include Hollywood starlets such as Jennifer Lawrence, Kate Upton and Kirsten Dunst. At best, this is a humiliation that represents one of the worst events that could happen, considering the timing of Apple’s much hyped press release next week, where it is widely expected that the iPhone 6 will be introduced, along with other surprises, potentially the iWatch. As is par for the course with Apple, the invites to the press release is deliberately layered in secrecy, a charming legacy from Steve Jobs. Now, one wonders how far an icon’s goodwill can last.
At the heart of the matter is data security, which has been a major talking point in recent years as the rise of so-called cyber-terrorism attains worrying depths of sophistication and leverage. The broader concern amongst government bodies is the asymmetrical impact that today’s hackers possess : a lone-wolf teenager in Russia or China could potentially unleash a torrent of digital hell half-way across the world with nothing more than a modem and broadband access.
Essentially, the internet is only as regulated and as civilized as the immediate consensus allows. As soon as someone has a “great idea” to breach a security network or to release a virus, that tenuous agreement is instantly vaporized. While Apple’s public relations team has gone to great lengths in avoiding direct blame, according to digital security expert Jonathan Zdziarski, the company failed to implement basic security measures in their proprietary network.
For example, their “Find My Phone” app allowed potential hackers an unlimited number of guesses at breaking open a user’s password. Although that vulnerability was immediately patched up in light of the recent controversy, this did not prevent Apple stock from getting hammered, with investors choosing to vote with their wallets and sending shares tumbling more than 4% during Wednesday’s trading.
But the biggest damage rendered to Apple did not affect a specific component of their company, but rather, the broader concept of cloud computing in which they pioneered advancement after advancement. Undoubtedly, people will question the technical integrity, perhaps even the morality, of trusting vital pieces of information in the hands of an unseen, and thus far, an unintelligent digital cloud. While technology will continue to grow and foster substantial improvements in people’s lives, the risks will likewise become amplified. Managing these risks to acceptable levels will be the next great challenge in the ever volatile tech industry.
In the financial sector, the broad market indices had a slow performance, with Western tensions towards Russia and Islamic radicals weighing heavily on investor sentiment throughout the week. The benchmark S&P 500 closed Thursday at 1,997 points, down 3 from the prior session. The safe-haven assets of gold and silver did not fare well either, dropping heavily in the middle of the week and in danger of violating key technical support levels.
Palladium’s rise to $900 dollars was short-lived, as volatility regarding the Ukrainian crisis shook off investor confidence. On the digital currency front, bitcoin languished early in the week, dropping to the 480 dollar range before moving back up towards 500 at last count.