Apple Inc. (NASDAQ:AAPL) is one of the AI Stocks Analysts are Tracking Closely. On October 28, Baird reiterated the stock as “Outperform” and raised its price target to $280 per share from $230. The firm said it’s bullish ahead of Apple earnings on Thursday.
The firm has updated its model, citing tailwinds from its upgrade cycle.
“Expect solid FQ4 results/guidance. It’s still early in the iPhone 17 cycle, but early indicators appear to be directionally supportive, including solid upgrade rates posted by AT & T/T-Mobile last week. However, the bigger focus is likely to be the December-quarter outlook, and we’d note that current estimates look potentially conservative based on historical sequential seasonality”
Stock market data on a laptop screen. Photo by Alesia Kozik on Pexels
Apple is a technology company known for its consumer electronics, software, and services.
While we acknowledge the potential of AAPL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.
Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, on May 3, 2024.
David A. Grogen | CNBC
Berkshire Hathaway‘s monstrous cash pile topped $300 billion in the third quarter as Warren Buffett continued his stock-selling spree and held back from repurchasing shares.
The Omaha-based conglomerate saw its cash fortress swell to a record $325.2 billion by the end of September, up from $276.9 billion in the second quarter, according to its earnings report released Saturday morning.
The mountain of cash kept growing as the Oracle of Omaha sold significant portions of his biggest equity holdings, namely Apple and Bank of America. Berkshire dumped about a quarter of its gigantic Apple stake in the third quarter, making the fourth consecutive quarter that it has downsized this bet. Meanwhile, since mid-July, Berkshire has reaped more than $10 billion from offloading its longtime Bank of America investment.
Overall, the 94-year-old investor continued to be in a selling mood as Berkshire shed $36.1 billion worth of stock in the third quarter.
No buybacks
Berkshire didn’t repurchase any company shares during the period amid the selling spree. Repurchase activity had already slowed down earlier in the year as Berkshire shares outperformed the broader market to hit record highs.
The conglomerate had bought back just $345 million worth of its own stock in the second quarter, significantly lower than the $2 billion repurchased in each of the prior two quarters. The company states that it will buy back stock when Chairman Buffett “believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.”
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Berkshire Hathaway
Class A shares of Berkshire have gained 25% this year, outpacing the S&P 500’s 20.1% year-to-date return. The conglomerate crossed a $1 trillion market cap milestone in the third quarter when it hit an all-time high.
For the third quarter, Berkshire’s operating earnings, which encompass profits from the conglomerate’s fully-owned businesses, totaled $10.1 billion, down about 6% from a year prior due to weak insurance underwriting. The figure was a bit less than analysts estimated, according to the FactSet consensus.
Buffett’s conservative posture comes as the stock market has roared higher this year on expectations for a smooth landing for the economy as inflation comes down and the Federal Reserve keeps cutting interest rates. Interest rates have not quite complied lately, however, with the 10-year Treasury yield climbing back above 4% last month.
Notable investors such as Paul Tudor Jones have become worried about the ballooning fiscal deficit and that neither of the two presidential candidates squaring off next week in the election will cut spending to address it. Buffett has hinted this year he was selling some stock holdings on the notion that tax rates on capital gains would have to be raised at some point to plug the growing deficit.
(Bloomberg) — A selloff in the world’s largest tech companies weighed heavily on stocks, while Treasury yields climbed amid bets the Federal Reserve will take a more measured approach on rate cuts.
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Equities extended losses into a third straight day, with the S&P 500 breaking below 5,800. Nvidia Corp. tumbled 4%, leading megacaps lower. Apple Inc. slid 3% after a closely followed analyst said iPhone 16 orders were cut by about 10 million units from the fourth quarter through the first half of 2025. As Tesla Inc. gets ready to report its results, Wall Street will be watching for signs that slowing sales are close to a trough.
FED: ECONOMIC ACTIVITY LITTLE CHANGED IN NEARLY ALL DISTRICTS
Investors face a number of risks that could be making them less willing to jump into the market: The next three weeks capture big tech earnings, October’s payrolls report, and the US election, followed by the Fed meeting. In another sign of Wall Street’s perception of future risk, the term premium on 10-year Treasury notes — an expression of the extra yield investors demand for owning the debt rather than rolling over shorter-term securities — hit the highest since November.
“This is about price exhaustion, this is about election exhaustion, it’s about campaign exhaustion, it’s about Fed exhaustion, it’s about policy exhaustion, it’s about geopolitical exhaustion,” said Kenny Polcari at SlateStone Wealth. “It’s about how stocks are stretched and it’s about the need for stocks to retreat, test lower, shake the branches, see who falls out and then move on.”
The S&P 500 fell 1.4%. The Nasdaq 100 dropped 2.1%. The Dow Jones Industrial Average slipped 1.3%. Boeing Co. dropped after signaling the company’s woes will take time to fix. Qualcomm Inc. got hit as Arm Holdings Plc canceled a license that allowed the company to use Arm’s intellectual property to design chips. Texas Instruments Inc. climbed after its results.
Treasury 10-year yields rose four basis points to 4.25%. A $13 billion sale of 20-year bonds tailed at the highest yield since May. The dollar rose against all of its Group-of-10 peers, on pace for its best month since 2022. The yen hit the lowest in almost three months, reviving concern that Japan may intervene. The loonie slid after the Bank of Canada stepped up the pace of easing.
Oil dropped as US crude inventories rose and the Biden administration renewed efforts to secure a cease-fire in the Middle East. Gold declined from a record.
To Jonathan Krinsky at BTIG, equities are finally noticing the moves in bonds and the dollar. That’s a stark contrast to the moves in the last couple of weeks. The bullish narrative was that bonds were re-pricing to where they should be based on the stronger-than-anticipated economy, he noted.
“While that might be fair in the big picture, markets are always concerned with the velocity of the move rather than the overall level, and the fact that stocks didn’t flinch in the face of those moves suggested complacency,” Krinsky said. Whether this is the start of the pre-election jitters or not, we continue to see downside risk for equities broadly over the coming weeks, with an SPX pullback into the 5,500-5,650 zone a decent probability.”
Swap prices reflect less than a 100% certainty that the central bank reduces rates at each of its two remaining policy meetings this year. The bond market is also trimming bets on the degree of Fed rate reductions over the next year. Traders will get more clarity next week on how much officials are likely to ease, with the release of a key labor-market reading for October.
“The price of options to hedge against Treasury losses is soaring,” said Andrew Brenner at NatAlliance Securities. “In the US, it is about the election and potential sweep. That is what is being built into the rate structure, which is giving the vigilantes the green light. It will reverse, but it might take a severe employment number or a surprise in the election.”
“We would caution investors from reading too much into the recent rise in bond yields,” said Tiffany Wilding at Pacific Investment Management Co. “Over the past six major Fed rate-cutting cycles, the change in the 10-year Treasury yield a month after the first cut has not provided a consistent signal about the magnitude of further cuts or whether the Us economy falls into recession.”
In fact, yields rose in the month after the first cut more often than not, she noted.
“Equity market performance in the first month after the Fed starts cutting has been a similarly bad predictor of future economic performance (and market returns),” Wilding said. “Equities, more often than not, have tended to rise in the month after a cutting cycle begins, despite more significant divergence as time goes on.”
Looking at the same starkly different cycles of 1995 and 2007, equity returns (proxied by the rate-sensitive Russell 2000 of small caps) in the month after the first cut were positive in both cycles (at 4.6% and 6.9%, respectively), Wilding said. However, equity market performance was down 4.4% in the year after the 2007 cut, while it was up 21% in the year following the 1995 adjustment.
“Even with the recent move in 10-year Treasury yields, we remain bullish on US large caps,” said Nicholas Colas at DataTrek Research. “History says to discount the idea that rates will blow out because of deficit worries, at least over the near term. Instead, we see higher yields as a sign that economic growth remains robust and corporate earnings growth should continue over the coming quarters.”
“All else equal, the more rate cuts that are removed for next year the less of an outlier reading it becomes for the market to achieve 15% earnings growth,” said Ryan Grabinski at Strategas. “However, additional rates cuts do not change the challenges the S&P faces with achieving that growth rate.”
Sales growth continues to show signs of slowing, and if analysts were suggesting rate cuts would reduce interest expense, that argument is beginning to recede, Grabinski said.
“Nearly 14% EPS margins continue to look more and more difficult to achieve,” he added. “The question is when does something give.”
“The equity market is extremely fragile considering the headwinds that are lurking right around the corner,” said Jose Torres at Interactive Brokers. “Earnings expectations are buoyant for next year, which increases the importance of forward guidance rather than past results.”
When considering that valuations are around 22 times next year’s profits, any disappointment in the outlook for the bottom line can significantly impact stock market performance, he added.
Corporate Highlights:
AT&T Inc. gained more mobile subscribers in the third quarter than analysts expected, continuing the winning streak from the previous period.
Hilton Worldwide Holdings Inc. lowered its profit outlook, as the addition of new hotels to its global system failed to offset slower travel demand.
Coca-Cola Co. dropped as investors weighed how much longer the soft-drink purveyor could raise prices without getting customers to buy more of its beverages.
Spirit Airlines Inc. jumped after the Wall Street Journal reported Frontier Group Holdings is exploring a renewed bid for the embattled carrier.
Capital One Financial Corp.’s proposed $35 billion acquisition of Discover Financial Services is being investigated by New York Attorney General Letitia James, who said the deal would have “significant impact” on consumers in the state.
Starbucks Corp. pulled its guidance for 2025, calling attention to the scope of the problems facing new Chief Executive Officer Brian Niccol.
McDonald’s Corp. is trying to contain the fallout from a severe E. coli outbreak that appears to be linked to onions in its Quarter Pounder sandwiches, which has killed one person and sickened dozens of people across the US.
Deutsche Bank AG said it will have to set aside more money than expected for souring debt, the second time this year it had to adjust its guidance.
Kering SA warned that its annual profit will fall to the lowest level since 2016 as a slump in Chinese demand for luxury goods hampers a turnaround of the French fashion group’s biggest label, Gucci.
Key events this week:
US new home sales, jobless claims, S&P Global Manufacturing and Services PMI, Thursday
UPS, Barclays earnings, Thursday
Fed’s Beth Hammack speaks, Thursday
US durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The S&P 500 fell 1.4% as of 2:06 p.m. New York time
The Nasdaq 100 fell 2.1%
The Dow Jones Industrial Average fell 1.3%
The MSCI World Index fell 1.2%
Currencies
The Bloomberg Dollar Spot Index rose 0.3%
The euro fell 0.3% to $1.0771
The British pound fell 0.5% to $1.2913
The Japanese yen fell 1% to 152.65 per dollar
Cryptocurrencies
Bitcoin fell 3.2% to $65,331.83
Ether fell 6.4% to $2,464.88
Bonds
The yield on 10-year Treasuries advanced four basis points to 4.25%
Germany’s 10-year yield declined one basis point to 2.30%
Britain’s 10-year yield advanced three basis points to 4.20%
Commodities
West Texas Intermediate crude fell 1.2% to $70.85 a barrel
Spot gold fell 1.2% to $2,714.99 an ounce
This story was produced with the assistance of Bloomberg Automation.
Apple CEO Tim Cook introduces the Apple Card during a launch event at the Apple headquarters in Cupertino, California, on March 25, 2019.
Noah Berger | AFP | Getty Images
The Consumer Financial Protection Bureau ordered Apple and Goldman Sachs on Wednesday to pay more than $89 million for mishandling consumer disputes related to Apple Card transactions.
The bureau said Apple failed to send tens of thousands of consumer disputes to Goldman Sachs. Even when Goldman Sachs did receive disputes, the CFPB said the bank did not follow federal requirements when investigating the cases.
Goldman Sachs was ordered to pay a $45 million civil penalty and $19.8 million in redress, while Apple was fined $25 million. The bureau also banned Goldman Sachs from launching new credit cards unless it can provide an adequate plan to comply with the law.
“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law,” said CFPB Director Rohit Chopra.
Apple Card was first launched in 2019 as a credit card alternative, hinged on Apple Pay, the company’s mobile payment and digital wallet service. The company partnered with Goldman Sachs as its issuing bank, and advertised the card as more simple and transparent than other credit cards.
That December, the companies launched a new feature that allowed users to finance certain Apple devices with the card through interest-free monthly installments.
But the CFPB found that Apple and Goldman Sachs misled consumers about the interest-free payment plans for Apple devices. While many customers thought they would get automatic interest-free monthly payments when they bought Apple devices with an Apple Card, they were still charged interest. Goldman Sachs did not adequately communicate to consumers about how the refunds would work, which meant some people ended up paying additional interest charges, according to the CFPB.
It also meant some consumers had incorrect credit reports, the agency said.
“Apple Card is one of the most consumer-friendly credit cards that has ever been offered. We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” Nick Carcaterra, vice president of Goldman Sachs corporate communications, told CNBC. “We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple.”
Representatives from Apple did not immediately respond to CNBC’s request for comment.
(Bloomberg) — Taiwan Semiconductor Manufacturing Co. raised its target for 2024 revenue growth after quarterly results beat estimates, allaying concerns about global chip demand and the sustainability of an AI hardware boom.
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The main chipmaker to Nvidia Corp. and Apple Inc. now expects sales to climb about 30% in US dollar terms this year, up from previous projections for about a mid-20% rise. That’s after TSMC reported better-than-predicted earnings for the September quarter. And it foresees capital expenditure rising in 2025 from roughly $30 billion this year.
TSMC’s outlook should help tamp down concerns that investors mis-judged the AI and semiconductor demand. Those fears crystallized after chip industry linchpin ASML Holding NV stunned markets by reporting about half the orders investors had expected. On Thursday, Chief Executive Officer C. C. Wei sought to dispel those doubts. Shares of the company trading on Tradegate gained 7.4% versus their last close on the German exchange.
Shares of Japanese chip gear makers including Lasertec Corp. pared losses in Tokyo, while Infineon Technologies AG rose in Europe alongside sector peers.
“The demand is real and I believe it’s just the beginning,” Wei said, echoing a number of executives including Nvidia Corp.’s CEO. In terms of overall chip demand, “everything’s stabilized and start to improve.”
TSMC’s shares have surged more than 70% this year, outpacing many of Asia’s biggest tech firms in a reflection of strong sales of the Nvidia chips vital to artificial intelligence development.
For a liveblog on TSMC’s earnings, click here.
Taiwan’s largest company had raised its outlook for 2024 revenue just a few months ago in July, underscoring expectations for spending on AI infrastructure from the likes of Microsoft Corp. and Amazon.com Inc. Steady adoption of artificial intelligence should also help fuel sales of iPhones and other gadgets in the long run.
Still, investors had watched for deviations in TSMC’s outlook after ASML blamed slower-than-expected recovery in the automotive, mobile and PC markets, impacting expansion plans for chip plants. AI remains a bright spot, its executives said.
On Thursday, TSMC reported a better-than-projected 54% rise in September-quarter net profit to NT$325.3 billion ($10.1 billion). And it expects revenue of $26.1 billion to $26.9 billion in the final quarter, beating an estimate for $24.9 billion.
While official trading of the company’s American depositary receipts won’t begin for a while, the ADRs were up about 4.5% on Robinhood’s overnight trading platform. TSMC is popular among US retail investors seeking to bet on the AI theme.
What Bloomberg Intelligence Says
TSMC’s guidance of a 57%+ gross margin, which surpasses consensus, coupled with a fast ramp-up of N3 nodes, indicating continuous robust high-performance computing chips, like AI training chip, production demand from Nvidia and others. This aligns with our expectations. Sales growth should be able to exceed 25% in 2025, supported by strong AI chip demand and TSMC’s leadership in 3- and 5-nm nodes, alongside advanced CoWoS packaging.
– Charles Shum, analyst
Click here for the research.
The world’s largest maker of advanced chips has been one of the biggest beneficiaries of a global race to develop artificial intelligence. Its shares have more than doubled since that boom took off in late 2022 with the debut of OpenAI’s ChatGPT. TSMC’s market capitalization briefly crossed the $1 trillion mark in the US.
Yet even before ASML, some investors have grown cautious about the trajectory of global AI spending. They question whether big tech firms like Meta Platforms Inc. and Alphabet Inc. will continue to splash out on AI chips and data centers without a truly killer AI application.
The risks of data center over-capacity and geopolitical issues have unnerved some investors. Bloomberg reported this week that Biden administration officials have discussed capping sales of advanced AI chips from Nvidia and other American companies on a country-specific basis.
On Thursday, Wei said he expects revenue from AI server processors to more than triple this year, yielding a mid-teens percentage of total sales in 2024.
Longer-term, TSMC is pursuing a rapid international expansion.
It’s planning more plants in Europe with a focus on the market for artificial intelligence chips, according to a senior Taiwanese official. That’s on top of construction underway in Japan, Arizona and Germany.
–With assistance from Vlad Savov, Cindy Wang, Mayumi Negishi and Lianting Tu.
(Updates with shares and executives’ comments from the fourth paragraph.)
AMD launched a new artificial-intelligence chip on Thursday that is taking direct aim at Nvidia’s data center graphics processors, known as GPUs.
The Instinct MI325X, as the chip is called, will start production before the end of 2024, AMD said Thursday during an event announcing the new product. If AMD’s AI chips are seen by developers and cloud giants as a close substitute for Nvidia’s products, it could put pricing pressure on Nvidia, which has enjoyed roughly 75% gross margins while its GPUs have been in high demand over the past year.
Advanced generative AI such as OpenAI’s ChatGPT requires massive data centers full of GPUs in order to do the necessary processing, which has created demand for more companies to provide AI chips.
In the past few years, Nvidia has dominated the majority of the data center GPU market, but AMD is historically in second place. Now, AMD is aiming to take share from its Silicon Valley rival or at least to capture a big chunk of the market, which it says will be worth $500 billion by 2028.
“AI demand has actually continued to take off and actually exceed expectations. It’s clear that the rate of investment is continuing to grow everywhere,” AMD CEO Lisa Su said at the event.
AMD didn’t reveal new major cloud or internet customers for its Instinct GPUs at the event, but the company has previously disclosed that both Meta and Microsoft buy its AI GPUs and that OpenAI uses them for some applications. The company also did not disclose pricing for the Instinct MI325X, which is typically sold as part of a complete server.
With the launch of the MI325X, AMD is accelerating its product schedule to release new chips on an annual schedule to better compete with Nvidia and take advantage of the boom for AI chips. The new AI chip is the successor to the MI300X, which started shipping late last year. AMD’s 2025 chip will be called MI350, and its 2026 chip will be called MI400, the company said.
The MI325X’s rollout will pit it against Nvidia’s upcoming Blackwell chips, which Nvidia has said will start shipping in significant quantities early next year.
A successful launch for AMD’s newest data center GPU could draw interest from investors that are looking for additional companies that are in line to benefit from the AI boom. AMD is only up 20% so far in 2024 while Nvidia’s stock is up over 175%. Most industry estimates say Nvidia has over 90% of the market for data center AI chips.
AMD stock fell 3% during trading on Thursday.
AMD’s biggest obstacle in taking market share is that its rival’s chips use their own programming language, CUDA, which has become standard among AI developers. That essentially locks developers into Nvidia’s ecosystem.
In response, AMD this week said that it has been improving its competing software, called ROCm, so that AI developers can more easily switch more of their AI models over to AMD’s chips, which it calls accelerators.
AMD has framed its AI accelerators as more competitive for use cases where AI models are creating content or making predictions rather than when an AI model is processing terabytes of data to improve. That’s partially due to the advanced memory AMD is using on its chip, it said, which allows it to server Meta’s Llama AI model faster than some Nvidia chips.
“What you see is that MI325 platform delivers up to 40% more inference performance than the H200 on Llama 3.1,” said Su, referring to Meta’s large-language AI model.
Taking on Intel, too
While AI accelerators and GPUs have become the most intensely watched part of the semiconductor industry, AMD’s core business has been central processors, or CPUs, that lay at the heart of nearly every server in the world.
AMD’s data center sales during the June quarter more than doubled in the past year to $2.8 billion, with AI chips accounting for only about $1 billion, the company said in July.
AMD takes about 34% of total dollars spent on data center CPUs, the company said. That’s still less than Intel, which remains the boss of the market with its Xeon line of chips. AMD is aiming to change that with a new line of CPUs, called EPYC 5th Gen, that it also announced on Thursday.
Those chips come in a number of different configurations ranging from a low-cost and low-power 8-core chip that costs $527 to 192-core, 500-watt processors intended for supercomputers that cost $14,813 per chip.
The new CPUs are particularly good for feeding data into AI workloads, AMD said. Nearly all GPUs require a CPU on the same system in order to boot up the computer.
“Today’s AI is really about CPU capability, and you see that in data analytics and a lot of those types of applications,” Su said.
A MLB store in the Myeongdong shopping district in Seoul, South Korea, on Saturday, March 9, 2024.
Bloomberg | Bloomberg | Getty Images
SINGAPORE — Asia-Pacific markets opened lower Wednesday morning, following a poor start to the trading month on Wall Street that saw major indexes fall amid rising Middle East tensions.
Australia’s S&P/ASX 200 opened down 0.2%, while Japan’s Nikkei 225 started the trading day lower by 1.5%. South Korea’s Kospi fell 1% at the open, while the small-cap Kosdaq was down 0.8%.
Hong Kong’s Hang Seng index futures were at 20,768, lower than the HSI’s last close of 21,133.68. Markets in Mainland China were closed Wednesday and will remain closed for the rest of the week due to the Golden Week holiday.
Traders in Asia were assessing data on consumer inflation out of South Korea. The country’s consumer price index rose 1.6% in September from a year earlier, data showed Wednesday morning, missing expectations by economists polled by Reuters who expected a rate of 1.9%.
Israeli Prime Minister Benjamin Netanyahu said Iran’s missile attacks had failed and vowed retaliation. “Iran made a big mistake tonight — and it will pay for it,” he said, according to NBC News, adding “the regime in Iran does not understand our determination to defend ourselves and our determination to retaliate against our enemies.”
—CNBC’s Brian Evans and Alex Harring contributed to this report.
The U.S. Justice Department on Tuesday sued Visa, the world’s biggest payments network, saying it propped up an illegal monopoly over debit payments by imposing “exclusionary” agreements on partners and smothering upstart firms.
Visa’s moves over the years have resulted in American consumers and merchants paying billions of dollars in additional fees, according to the DOJ, which filed a civil antitrust suit in New York for “monopolization” and other unlawful conduct.
“We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” Attorney General Merrick Garland said in a DOJ release.
“Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service,” Garland said. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”
Visa and its smaller rival Mastercard have surged over the past two decades, reaching a combined market cap of roughly $1 trillion, as consumers tapped credit and debit cards for store purchases and e-commerce instead of paper money. They are essentially toll collectors, shuffling payments between banks operating for the merchants and for cardholders.
Visa called the DOJ suit “meritless.”
“Anyone who has bought something online, or checked out at a store, knows there is an ever-expanding universe of companies offering new ways to pay for goods and services,” said Visa general counsel Julie Rottenberg.
“Today’s lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving,” Rottenberg said. “We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable.”
More than 60% of debit transactions in the U.S. run over Visa rails, helping it charge more than $7 billion annually in processing fees, according to the DOJ complaint.
The payment networks’ decades-old dominance has increasingly attracted attention from regulators and retailers.
In 2020, the DOJ filed an antitrust suit to block Visa from acquiring fintech company Plaid. The companies initially said they would fight the action, but soon abandoned the $5.3 billion takeover.
In March, Visa and Mastercard agreed to limit their fees and let merchants charge customers for using credit cards, a deal retailers said was worth $30 billion in savings over a half decade. A federal judge later rejected the settlement, saying the networks could afford to pay for a “substantially greater” deal.
In its complaint, the DOJ said Visa threatens merchants and their banks with punitive rates if they route a “meaningful share” of debit transactions to competitors, helping maintain Visa’s network moat. The contracts help insulate three-quarters of Visa’s debit volume from fair competition, the DOJ said.
“Visa wields its dominance, enormous scale, and centrality to the debit ecosystem to impose a web of exclusionary agreements on merchants and banks,” the DOJ said in its release. “These agreements penalize Visa’s customers who route transactions to a different debit network or alternative payment system.”
Furthermore, when faced with threats, Visa “engaged in a deliberate and reinforcing course of conduct to cut off competition and prevent rivals from gaining the scale, share, and data necessary to compete,” the DOJ said.
The moves also tamped down innovation, according to the DOJ. Visa pays competitors hundreds of millions of dollars annually “to blunt the risk they develop innovative new technologies that could advance the industry but would otherwise threaten Visa’s monopoly profits,” according to the complaint.
Visa has agreements with tech players including Apple, PayPal and Square, turning them from potential rivals to partners in a way that hurts the public, the DOJ said.
For instance, Visa chose to sign an agreement with a predecessor to the Cash App product to ensure that the company, later rebranded Block, did not create a bigger threat to Visa’s debit rails.
A Visa manager was quoted as saying “we’ve got Square on a short leash and our deal structure was meant to protect against disintermediation,” according to the complaint.
Visa has an agreement with Apple in which the tech giant says it will not directly compete with the payment network “such as creating payment functionality that relies primarily on non-Visa payment processes,” the complaint alleged.
The DOJ asked for the courts to prevent Visa from a range of anticompetitive practices, including fee structures or service bundles that discourage new entrants.
The move comes in the waning months of President Joe Biden‘s administration, in which regulators including the Federal Trade Commission and the Consumer Financial Protection Bureau have sued middlemen for drug prices and pushed back against so-called junk fees.
In February, credit card lender Capital One announced its acquisition of Discover Financial, a $35.3 billion deal predicated in part on Capital One’s ability to bolster Discover’s also-ran payments network, a distant No. 4 behind Visa, Mastercard and American Express.
Capital One said once the deal is closed, it will switch all its debit card volume and a growing share of credit card volume to Discover over time, making it a more viable competitor to Visa and Mastercard.
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments. 1. Stocks opened higher Monday in a continuation of last week’s momentum, which saw all major indexes gain more than 1%. The Dow closed Friday at a record while the S & P 500 did so Thursday . The strength followed the Federal Reserve’s half-percentage point interest rate cut Wednesday. Health care, a classic defensive sector, is underperforming Monday as investors grow more confident in the possibility of a soft landing for the U.S. economy. Meanwhile, technology — and the semiconductor industry, more specifically — are having a mixed day as Wall Street weighs reports around Intel . In addition to last week’s reports that Qualcomm has discussed buying Intel, Bloomberg News said private equity giant Apollo Global Management has approached the struggling chipmaker with an multibillion investment offer. 2. Despite a slight dip in the S & P 500 Friday, the S & P Short Range Oscillator moved further into overbought territory at 7.3%. A session prior, Jim Cramer’s trusted momentum indicator was at 6.68%. We want to see some market choppiness to work off the overbought reading — as a reminder, anything above 4% on the Oscillator is considered overbought. In this environment, we prefer to raise cash rather than buying stocks. That helps explain why we trimmed Morgan Stanley last week during the post-Fed rate cut rally. Another reason for offloading some shares is the possibility of switching to a different financial stock such as Goldman Sachs , a move Jim has been considering for some time now. 3. Wall Street’s early checks for Apple ‘s new iPhone 16, which hit stores Friday, remain all over the place. Barclays concluded there’s muted demand across both Pro and base models due to shorter lead times compared with last year. Conversely, JPMorgan observed expanding lead times mid-week, suggesting “healthy demand” overall, though lead times were a little softer versus last year on higher-end Pro and Pro Max models. Citigroup analysts also reported an increase in delivery times for the base and Pro models. Director of Portfolio Analysis Jeff Marks advised investors to minimize the noise. “If you’re trying to trade it on every headline, you would have missed such a fantastic move,” Jeff said, alluding to our “own it, don’t trade it” mantra. Additionally, last week T-Mobile’s CEO told Jim in an interview that initial demand for the iPhone 16 looked good relative to the iPhone 15 a year ago. (Jim Cramer’s Charitable Trust is long AAPL, MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
A worker sweeps the floor at the Nasdaq MarketSite in New York, US, on Monday, Sept. 16, 2024.
Yuki Iwamura | Bloomberg | Getty Images
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Tech surges After taking a day to digest the U.S. Federal Reserve’s rate cut, investors flocked to tech stocks. On Thursday, Tesla soared 7.4%, Nvidia popped 4% and Apple jumped 3.7%. Lifted by those stocks, the Nasdaq rose 2.5%, its fourth-biggest single-day gain in 2024. Its sharpest rally this year was a 3% increase on Feb. 22.
“Recalibration” Fed Chair Jerome Powell’s use of the word “recalibration” seemed to reassure investors that the central bank’s 50 basis point cut wasn’t thatworrying. It signaled the Fed wasn’t responding to a slowing economy, but shifting focus to ensuring employment doesn’t dip further, wrote CNBC’s Jeff Cox.
Staying its hand The Bank of England decided to hold interest rates steady at 5%. The decision was nearly unanimous: Only one out of nine members in the Monetary Policy Committee voted to reduce rates by a quarter percentage point. Market watchers expect the BOE to cut rates at its next meeting in November.
[PRO] Another big cut? Some experts thought the Fed would lower rates by a quarter percentage point at its September meeting.That call was wrong. A JPMorgan Chase economistnailed the half-point call – and he sees another big rate cut in November.
“Twenty-four little hours / Brought the sun and the flowers / Where there used to be rain,” sings American 1950s star Dinah Washington.
Washington might as well be singing about the market’s behavior. Immediately after the Fed announced the jumbo rate slash on Wednesday, stocks hit fresh highs before falling into the red by the end of that day.
But twenty-four hours later, after investors assessed that the half-point cut probably didn’t portend the start of a recession, major indexes rallied to close at record highs.
The S&P climbed 1.7% to end at 5,713.64, the first time the broad-based index has broken through the 5,700 ceiling. Likewise, the Dow closed at 42,025.19, its first above the 42,000 level, after the index rose 1.26%.
The Nasdaq, buoyed by a rally in names like Tesla, Nvidia and Apple, was the biggest winner among major indexes, surging 2.51%, for its fourth-best day this year.
And while history shows that September hasn’t been nice to stocks, it also tells us that when the S&P notches record highs during the month, the fourth quarter’s likely to remain strong. Since 1950, this pattern has played out in 20 out of 22 occasions, noted Oppenheimer.
Indeed, BMO is so bullish about the market that the bank raised its year-end target for the S&P to 6,100 – an 8.6% climb from Wednesday’s close – the highest projection on Wall Street.
“Much like our last target increase in May, we continue to be surprised by the strength of market gains and decided yet again that something more than an incremental adjustment was warranted,” chief investment strategist Brian Belski wrote to clients in a Thursday note.
At the end of Washington’s song, she croons, “What a difference a day makes / And the difference is you.” Powell can perhaps feel like Washington’s serenading him.
– CNBC’s Alex Harring, Fred Imbert, Hakyung Kim and Lisa Kailai Han contributed to this story.
Correction: An earlier version of this report did not state the time frame for the Nasdaq’s best performance. It has been added to this report.
Apple CEO Tim Cook introduces the Apple Card during a launch event at Apple headquarters in Cupertino, California, on March 25, 2019.
Noah Berger | AFP | Getty Images
Apple is in discussions with JPMorgan Chase for the bank to take over the tech giant’s flagship credit card program from Goldman Sachs, a person with knowledge of the negotiations said.
The discussions are still early and key elements of a deal — such as price and whether JPMorgan would continue certain features of the Apple Card — are yet to be decided, said the person, who requested anonymity to discuss the nature of the potential deal. The talks could fall apart over these or other matters in the coming months, this person said.
But the move shows the extent to which Apple’s choices were limited when Goldman Sachs decided to pivot from its ill-fated retail banking strategy. There are only a few card issuers in the U.S. with the scale and appetite to take over the Apple Card program, which had saddled Goldman with losses and regulatory scrutiny.
JPMorgan is the country’s biggest credit card issuer by purchase volume, according to the Nilson Report, an industry newsletter.
The bank is seeking to pay less than face value for the roughly $17 billion in loans on the Apple Card because of elevated losses on the cards, the person familiar with the matter said. Sources close to Goldman argued that higher-than-average delinquencies and defaults on the Apple Card portfolio were mostly because the users were new accounts. Those losses were supposed to ease over time.
But questions around credit quality have made the portfolio less attractive to issuers at a time when there are concerns the U.S. economy could be headed for a slowdown.
JPMorgan is also seeking to do away with a key Apple Card feature known as calendar-based billing, which means that all customers get statements at the start of the month rather than staggered throughout the period, the person familiar with the matter said. The feature, while appealing to customers, means service personnel are flooded with calls at the same time every month.
Apple and JPMorgan declined to comment on the negotiations, which were reported earlier by The Wall Street Journal.
The sun rises behind the skyline of lower Manhattan and One World Trade Center on September 14, 2024, in Jersey City, New Jersey.
Gary Hershorn | Corbis News | Getty Images
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Intel forges new path for foundry Intel shares popped around 8% in extended trading on news the chipmaker plans to structure its foundry business as an independent unit with its own board and ability to raise outside funding. It might even spin off the business as a public company, according to a person with knowledge of the matter. Separately, the Biden administration on Monday awarded Intel up to $3 billion under the CHIPS Act.
Blemished Apple Apple shares slid 2.78% after TF Securities analyst Ming-Chi Kuo reporteddemand for Apple’s new iPhone 16 was down 12% year on year compared with the iPhone 15’s first-weekend sales. Kuo also said consumers weren’t enthused because Apple Intelligence wasn’t available with the iPhone at launch, and as competition from Chinese manufacturers dents iPhone demand.
[PRO] Short-lived record? The S&P 500 is less than 1% away from its record high set in July. The upcoming Federal Open Market Committee meeting, at which the U.S. Federal Reserve is expected to cut interest rates by at least 25 basis points, might lift the S&P to new heights. But analysts warn the new high might be short lived.
Technology stocks benefit the most from low interest rates, conventional market wisdom says.
That’s because tech companies tend to promise future profit in exchange for present money. When rates are low, that proposition appears attractive because returns are low elsewhere. But when rates are high, those promises don’t seem as attractive as less risky returns from assets such as Treasurys.
The past two years have demolished this narrative. Tech has soared even as interest rates have been at 23-year highs, thanks to enthusiasm over artificial intelligence’s promise of new and explosive revenue streams.
Nvidia, the lynchpin of AI, has soared nearly 136% just this year. Meta, which has its own AI model named Llama, is up about 51%.
With the market pricing in a 62% chance — up from 30% last week — that the U.S. Federal Reserve will make a larger-than-usual cut of 50 basis points, according to the CME FedWatch Tool, it stands to reason tech will pop further.
The sector, however, has been rocky in recent weeks. The VanEck Semiconductor ETF, for instance, fell 1.31% Monday, while Nvidia slipped 1.95%.
This implies investors have been moving out of tech to other sectors that might experience tailwinds amid lower rates. Case in point: the financial and energy sectors rose more than 1% on Monday, performing better than the broader market.
Goldman Sachs noted hedge funds’ weekly purchases last week of financial stocks were the highest since June 2023.
“Other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Christopher Barto, senior investment analyst at Fort Pitt Capital.
That doesn’t mean tech’s out of favor. It’s likely to continue driving the market. But other sectors might show up for the ride.
– CNBC’s Hakyung Kim, Pia Singh and Yun Li contributed to this story.
JP Morgan headquarters at Canary Wharf financial district at the heart of Canary Wharf financial district on 6th February 2024 in London, United Kingdom.
Mike Kemp | In Pictures | Getty Images
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First Harris-Trump debate In their first face-to-face meeting, Vice President Kamala Harris met former President Donald Trump for their first — and perhaps only – presidential debate. On the economic front, both candidates clashed over tariffs, fracking and China policy. After the debate, Taylor Swift endorsed Harris on Instagram, and signed off her post as “Childless Cat Lady.”
Tough environment for European companies China’s environment for businesses is so thorny that European companies have grown discouraged with operating in the country, according to the EU Chamber of Commerce. If European companies were to invest in China further, Beijing must act on its pledges to improve the business conditions, the chamber’s paper wrote.
Big price reports The U.S. consumer price index for August comes out later today, while the producer price index, which measures prices at the wholesale level, will be released a day later. They’re the last major economic data the Federal Reserve will receive — and hence influence its decision on the size of cuts — before its meeting next week.
[PRO] U.S.-listed global stocks With the outlook for the U.S. economy looking uncertain, investors can turn their attention to global companies. At the same time, investors may want to stick with the safety of the U.S. stock market. CNBC Pro looked for companies headquartered overseas, but listed in the U.S. – and may experience over 100% upside, according to analysts.
As rates fall, borrowing becomes cheaper. For the consumer, that’s most felt in areas like housing; for companies, it tends to boost spending on expansion and investment.
Those acts trigger a virtuous cycle of spending, boosting consumption and growth, which in turns increases employment. The economy loves lower rates too and swells up.
There’s one industry, however, that generally enjoys higher interest rates: banking.
One way banks make money is through the net interest income. That’s the difference between the interest rate they charge on loans and the rate they offer on savings. As rates rise, banks can raise the former, which is a revenue source, while keeping the latter, a cost, low.
With rate cuts looming on the horizon, however, that age of abundance is coming to an end for big banks.
JPMorgan poured cold water on the market’s expectation of around $90 billion for NII in 2025. That number “is not very reasonable” because the Fed will cut rates, said JPMorgan President Daniel Pinto.
If the biggest bank in the U.S. thinks it can’t keep loan rates high, it’s hard to imagine smaller banks can maintain juicy NII of the previous years.
Investors didn’t take JPMorgan’s caution warmly. Its shares lost around 5% and weighed down the Dow Jones Industrial Average, which declined 0.23%.
JPMorgan signage outside a Chase bank branch in New York, US, on Thursday, Jan. 12, 2023.
Stephanie Keith | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Big price reports The U.S. consumer price index for August comes out later today, while the producer price index, which measures prices at the wholesale level, will be released a day later. They’re the last major economic data the Federal Reserve will receive — and hence influence its decision on the size of cuts — before its meeting next week.
Endgame for Basel regulations The Basel Endgame regulation, introduced in July 2023, was meant to increase capital requirements for big banks by around 19%. On Tuesday, however, a Federal Reserve official announced that regulatory institutions have agreed to resubmit the proposal, reducing the increase in capital requirement to just 9%.
Risk of stagflation Jamie Dimon, CEO of JPMorgan Chase, said stagflation is a possibility for the U.S. The government’s budget deficit and high spending on infrastructure works are inflationary forces, he said. Separately, JPMorgan shares fell 5.19% after the bank’s president Daniel Pinto lowered expectations for next year’s net interest income.
[PRO] Underwhelming Apple Intelligence Apple announced new iPhones yesterday. But Wall Street was more focused on the company’s artificial intelligence offerings, given their potential to start an iPhone-upgrade cycle and establish a new source of revenue. Unfortunately, analysts came away underwhelmed.
As rates fall, borrowing becomes cheaper. For the consumer, that’s most felt in areas like housing; for companies, it tends to boost spending on expansion and investment.
Those acts trigger a virtuous cycle of spending, boosting consumption and growth, which in turns increases employment. The economy loves lower rates too and swells up.
There’s one industry, however, that generally enjoys higher interest rates: banking.
One way banks make money is through the net interest income. That’s the difference between the interest rate they charge on loans and the rate they offer on savings. As rates rise, banks can raise the former, which is a revenue source, while keeping the latter, a cost, low.
With rate cuts looming on the horizon, however, that age of abundance is coming to an end for big banks.
JPMorgan poured cold water on the market’s expectation of around $90 billion for NII in 2025. That number “is not very reasonable” because the Fed will cut rates, said JPMorgan President Daniel Pinto.
If the biggest bank in the U.S. thinks it can’t keep loan rates high, it’s hard to imagine smaller banks can maintain juicy NII of the previous years.
Investors didn’t take JPMorgan’s caution warmly. Its shares lost around 5% and weighed down the Dow Jones Industrial Average, which declined 0.23%.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets : It has been a choppy session for stocks Tuesday, with the S & P 500 trying to go for two positive sessions in a row after falling four straight last week. The big tech stocks were having a solid day, rallying on Oracle’s upbeat comments about artificial intelligence demand. All of our Super Six megacaps were higher, even Club stock Apple was pushing to stay in the green after getting mixed reviews on Monday’s iPhone 16 event. We think that focusing on what was said on the stage about the AI-enabled device and not the runway being created is shortsighted. Banks : The financial sector was getting hammered Tuesday. It’s hard to get a broader market rally going when the banks act this poorly. A disappointing update from JPMorgan at Barclays Global Financial Services Conference was acting as a drag on the whole group. At the event, JPMorgan President and COO Daniel Pinto shared a discouraging view on its current quarter (third quarter) capital markets business. But what dropped the hammer was when Pinto was asked about 2025. He said he thinks the Street is modeling net interest income (NII) and expense estimates that are “too optimistic.” In other words, Pinto thinks JPMorgan will need to spend a little more and will earn a little less versus what analysts are currently forecasting. That means every analyst needs to lower its earnings estimate for next year. Stock prices tend to follow earnings, which was why Dow stock JPMorgan shares dropped nearly 5.5% on Tuesday. JPMorgan’s comments are reverberating across the sector, with many believing that if estimates for the gold standard are too high, then everyone else’s are also too high. It’s too early to know if Pinto is practicing UPOD –under promise, over deliver, in typical CEO Jamie Dimon fashion. But sometimes, it’s better for stocks when you get the bad news out of the way, which alternatively could be the case. It’s worth mentioning that Club name Wells Fargo backed its 2024 guide at the conference Tuesday while fellow Club holding Morgan Stanley said M & A and IPO revenue will be below trendline through the rest of the year before ramping up in 2025. Both stocks were lower on the session. New boss : Starbucks CEO Brian Niccol has officially been on the job for only two days, but he already published an open letter discussing the four key areas he’s focused on in his first 100 days. They are: (1) Empowering baristas to take care of customers; (2) Get the morning right, every morning; (3) Reestablishing Starbucks as the community coffeehouse; and (4) Telling our [Starbucks’] story. We think it’s clear that Niccol is hitting the ground running. “This letter was strong. Niccol recognizes complexity is the enemy and the baristas have not been empowered to make changes. That will change going forward,” Jim Cramer said Tuesday. The Club owns shares of Starbucks. In the letter, Niccol said the U.S. is where he needs to focus first with planned investments in technology to enhance the partner and customer exposure, improve the supply chain, and enhance the app and mobile ordering platform. Outside the United States, Niccol wrote that in China Starbucks needs to “understand the potential path to capture growth” and capitalize on its strengths. That’s an interesting line because you could argue that Starbucks needs to pullback its aggressive expansion plans in the world’s second-largest economy. Elsewhere, around the world, Niccol said he sees “enormous potential for growth” in international markets, especially in the Middle East where he said Starbucks will “work to dispel misconceptions about our brand.” Up next : After Tuesday’s closing bell, GameStop , Dave & Buster’s , and Petco report earnings. On Wednesday, it’s the August consumer price index. Expectations call for a headline CPI increase of 2.5% year over year and a 3.2% year-over-year rise in the core rate, which excludes volatile food and energy prices. The report could provide some clarity around the debate on whether the Fed should cut 25 or 50 basis points at its Sept. 17-18 meeting. Thursday brings the August producer price index, though it could be said that the Fed is more focused on the softening labor market right now. The Fed’s dual mandate calls for fostering maximum employment and price stability. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments. Stocks fell Tuesday despite an early pop in tech stocks, led by Oracle ‘s 11% gain. The database software maker posted a fiscal 2025 first-quarter beat on the top and bottom lines Monday after the bell. The company is aggressively building out data centers to meet artificial intelligence demands from its customers. The Investing Club portfolio has lots of exposure to the AI buildout through its investments in Eaton , Dover , Broadcom and Nvidia , among others. Meanwhile, shares of Apple were down 1% following the company’s iPhone 16 event Monday. While the announcements on its new AI capabilities weren’t needle movers for the stock, they should be a long-term driver of growth. Bank stocks were also down Tuesday, with shares of JPMorgan falling 6.5% after the company offered a cautious outlook at a banking conference. Club stock Wells Fargo was being painted with a broad brush, falling 2%. At the conference, Wells made no change in its forecasts. Jim reiterated his favorable view on Wells Fargo, citing its 3% annual dividend yield and “incredibly cheap” valuation. Also on watch are proposals from the Fed’s vice chair for supervision that would lower the extra capital cushion required of big banks. Costco caught a downgrade Tuesday from Redburn Atlantic. The analysts went to a neutral rating from buy — calling the stock’s valuation too expensive. The analysts increased Costco’s price target to $890 per share from $860. But that’s only right at the level Costco was trading Tuesday. Analysts said the current risk/reward profile on the stock is “skewing less favorably given the even higher than normal expectations.” Jim said, however, “Costco has been expensive and always will be expensive,” suggesting it’s worth it. Stocks covered in Tuesday’s rapid fire at the end of the video were Southwest , Oracle , Johnson Controls , Boot Barn , and Goldman Sachs . (Jim Cramer’s Charitable Trust is long ETN, DOV, AVGO, NVDA, WFC, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
New models of the Apple iPhone 16 are displayed after Apple’s “It’s Glowtime” event in Cupertino, California, September 9, 2024.
Nic Coury | AFP | Getty Images
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Export growth in China China’s exports in August rose 8.7% year on year, in U.S. dollar terms, beating Reuters’ estimates of a 6.5% rise. Exports to the EU grew 13% from a year earlier, the most among China’s major trading partners, according to CNBC calculations of official data. Imports growth at 0.5% fell short of analysts’ expectations.
New iPhones Apple unveiled lots of new products on Monday night. Highlights: the iPhone 16 Pro and Pro Max get larger screens, while their non-pro siblings finally get the Pro’s “action” button; the freshly redesigned Apple Watch Series 10; AirPods 4 earbuds. Apple’s AI features will launch in beta on the new iPhones — investors will monitor if they push up flagging iPhone sales.
$400 million hit to Goldman Goldman Sachs will post a roughly $400 million pretax hit to its third-quarter results, said CEO David Solomon at a conference on Monday, as the bank winds down its ill-fated foray into consumer banking. Those ventures include Goldman’s GM Card business and a separate portfolio of loans.
[PRO] Stocks to ride out shaky September September is historically the worst month for stocks. It’s the only month during which markets fell for four consecutive years. The volatility we’ve experienced at the start of the month seems to continue this unwelcome trend. Still, there are some steady stocks investors can consider to ride out September’s roller coaster.
Maybe all it takes are shiny new things to lift our mood and take our minds off recession fears.
I’m jesting — but just partially.
Apple on Monday launched sleek new iPhones, watches and earphones. The excitement of the event and the prospect of having something look forward to may have lifted market sentiment.
Detractors who think that’s a far-fetched assertion should remember Apple dominates more than half of smartphone shipments in the U.S., according to Counterpoint Research. Further, a 2023 Bloomberg survey found 79% of Gen Zers prefer iPhones over other smartphones, implying that Apple’s market share could grow more as that demographic gains earning power.
True, post-event, Apple shares just crawled up 0.04%. But, as CNBC’s Kelly Evans points out, the Cupertino-headquartered company’s stock tends to fall after product announcements.
This reversal of the trend offers a glimmer of hope that Apple’s plans to integrate AI into its phones will rejuvenate iPhone sales, which have been slumping amid increased competition from Chinese brands.
And when the S&P 500’s biggest constituent is experiencing favorable winds, other stocks will also benefit from its slipstream.
Apart from Apple’s announcement, there wasn’t any other material news that would have impacted markets.
Of course, Apple’s event is not the sole reason markets rose yesterday. Last week’s broad sell-off presents investors with opportunities to pick up stocks at a relatively cheaper price, which would induce a rebound rally.
That said, the consumer and producer price index reports coming out Wednesday and Thursday, respectively, are concrete pieces of data that have the potential to affect markets dramatically.
They’ll also let us know if we can afford those shiny new things that Apple’s dangling in front of us.
– CNBC’s Pia Singh and Lisa Kailai Han contributed to this story.
Attendees inspect the new iPhone 16 Pro and 16 Pro Max during an Apple special event at Apple headquarters on September 09, 2024 in Cupertino, California.
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
New iPhones Apple unveiled lots of new products on Monday night. Highlights: the iPhone 16 Pro and Pro Max get larger screens, while their non-pro siblings finally get the Pro’s “action” button; the freshly redesigned Apple Watch Series 10; AirPods 4 earbuds. Apple’s AI features will launch in beta on the new iPhones — investors will monitor if they push up flagging iPhone sales.
Debate over rate cuts Economists such as George Lagarias of Forvis Mazars think a 50-basis-points rate cut “might send a wrong message to markets.” Michael Yoshikami, CEO of Destination Wealth Management, however, thinks it would be “a very positive sign,” echoing Nobel Prize winner Joseph Stiglitz’s opinion that a 50-point cut should be on the table.
$400 million hit to Goldman Goldman Sachs will post a roughly $400 million pretax hit to its third-quarter results, said CEO David Solomon at a conference on Monday, as the bank winds down its ill-fated foray into consumer banking. Those ventures include Goldman’s GM Card business and a separate portfolio of loans.
[PRO] Macro factors don’t sway Buffett In recent weeks, markets have gyrated because of concerns over the U.S. economy’s health, the state of the labor market, the trajectory of rate cuts, among many other factors. To Warren Buffett, however, none of those macroeconomic factors matters when he invests.
Maybe all it takes are shiny new things to lift our mood and take our minds off recession fears.
I’m jesting — but just partially.
Apple on Monday launched sleek new iPhones, watches and earphones. The excitement of the event and the prospect of having something look forward to may have lifted market sentiment.
Detractors who think that’s a far-fetched assertion should remember Apple dominates more than half of smartphone shipments in the U.S., according to Counterpoint Research. Further, a 2023 Bloomberg survey found 79% of Gen Zers prefer iPhones over other smartphones, implying that Apple’s market share could grow more as that demographic gains earning power.
True, post-event, Apple shares just crawled up 0.04%. But, as CNBC’s Kelly Evans points out, the Cupertino-headquartered company’s stock tends to fall after product announcements.
This reversal of the trend offers a glimmer of hope that Apple’s plans to integrate AI into its phones will rejuvenate iPhone sales, which have been slumping amid increased competition from Chinese brands.
And when the S&P 500’s biggest constituent is experiencing favorable winds, other stocks will also benefit from its slipstream.
Apart from Apple’s announcement, there wasn’t any other material news that would have impacted markets.
Of course, Apple’s event is not the sole reason markets rose yesterday. Last week’s broad sell-off presents investors with opportunities to pick up stocks at a relatively cheaper price, which would induce a rebound rally.
That said, the consumer and producer price index reports coming out Wednesday and Thursday, respectively, are concrete pieces of data that have the potential to affect markets dramatically.
They’ll also let us know if we can afford those shiny new things that Apple’s dangling in front of us.
– CNBC’s Pia Singh and Lisa Kailai Han contributed to this story.
India’s Prime Minister Narendra Modi speaks prior to a meeting with Brunei Sultan Hassanal Bolkiah at Istana Nurul Iman in Bandar Seri Begawan on September 4, 2024.
Dean Kassim | Afp | Getty Images
SINGAPORE — India and Singapore on Thursday signed memorandums of understanding for cooperation on a number of key areas including semiconductors, digital technologies, skill development and health care.
The announcement comes during Indian Prime Minister Narendra Modi’s two-day visit to the Lion City, which began Wednesday following a trip to Brunei.
“Singapore and India have built strong foundations for an enduring partnership. The next phase of the Singapore-India partnership is very promising,” Singapore Deputy Prime Minister Heng Swee Keat said at the Singapore-India Forum organized by the Singapore-India Partnership Foundation, Institute of South Asian Studies and the Singapore Business Federation.
“Singapore, India and the rest of Asia must continue to strengthen on economic connectivity and integration, to allow for capital, ideas and talent to find their optimal uses,” he said.
India’s GDP per capita currently stands at $2,730, significantly lower than that of the U.S. ($85,370), China ($13,140), Germany ($54,290) and Japan ($33,140), data from the International Monetary Fund showed. Those four economies are also the same ones the South Asian nation is currently trailing behind in terms of overall GDP.
“Singapore is not just a partner, it is an inspiration for every developing country. We want to create a bunch of Singapores in India,” Modi said in a meeting with Wong.
Increased collaboration can also help both nations overcome “common challenges” such as climate change, aging populations and public health, Heng highlighted.
Modi’s entourage also included Minister of External Affairs S. Jaishankar, National Security Advisor Ajit Doval along with other government officials.
In a post on X, Modi called Wong a friend and said, “We both agreed on the need to boost trade relations.”
The country is India’s sixth largest trading partner, with 3.2% share of India’s overall trade. Imports from Singapore in financial year 2024 amounted to $21.2 billion, while exports totaled $14.4 billion.
Asia’s biggest financial hub is also the largest source of foreign direct investments into India. Cumulative FDI inflows from Singapore to India stood at almost $160 billion from April 2000 to March 2024, amounting to almost a quarter of total FDI inflows to the South Asian nation.
Political watchers told CNBC before Modi’s visit that there are many lessons India can learn from Singapore as it aspires to transform into a global design and manufacturing hub.
“It’s not lost on the Indians that the Chinese have emerged, in part because of significant utilities that they got from Singapore in the 1980s to 1990s, and perhaps even to this day,” Anit Mukherjee, a senior lecturer at King’s College London, told CNBC.
Singapore has long been lauded for its state-of-the-art manufacturing facilities, attracting global tech and pharmaceutical giants.
The city-state accounts for 10% of chips produced worldwide and around 20% of global semiconductor manufacturing equipment production, according to Singapore’s Economic Development Board.
India’s manufacturing industry has also made significant strides in the past few years, with Apple supplier Foxconn committing to ramping up investments in the country, while Micron Technology is set to create its first India-made semiconductor chip by early 2025.
However, the world’s fifth-largest economy still has a long way go.
“When you are deploying billions of dollars to promote a domestic industry, there are a lot of nuts and bolts that need to be sorted out. So this is absolutely the time for India to learn from Singapore’s successful playbook,” said Samir Kapadia, CEO of India Index and managing principal at Vogel Group.
In the last seven years, Singapore has opened skill development centers in various Indian states, such as New Delhi and the north-eastern city of Guwahati.
“This is not just about incentivizing investments for the semiconductor industry, but learning how to govern massive industrial planning and incentive initiatives,” Kapadia added.
— CNBC’s Vinay Dwivedi contributed to this report.
