Today's focus is Apple (AAPL) with the event shareholder and consumer friendly in a sense. Consumers love the echo-system and moan about prices as well as monthly costs, but it's not a hindrance to Apple...the majority don't care as they gripe about it.

Freepik

However, in China, the new 5G Huawei phone combined with Beijing's hard-ball bullying (I think to keep Apple production 'in' China as a tough-love style tactic). To me the real question is AI beyond Siri's capabilities, and that leaves openings for Apple to continue building a parallel system of embrace another (of course we have SoundHound in-mind, but for now they go it solo with lots of name-brand partners). As for Apple I personally welcome the 'better' WiFi and signal strength on iPhone 15 ProMax, and anticipate a 32" iMac in 2024.

By the way turns-out China's so-called (mandated?) competition by Huawei is 'not really' 5G as they claimed, but has speeds '5G-like'. Apple regular buyers do so because of the ecosystem or semi-pro photography needs and in-order to integrate use with a MAC. That probably will remain the case in China too, but you never know. Also 'connectivity integration' is easiest with Apple, next with Android (like Samsung's), and least with generic systems like Huawei.

Oh...the 'spatial vision' 3D camera feature on the ProMax fascinates those of course with 'VisionPro' aspirations, otherwise it's not relevant for daily use.

For a moment I'll note SoundHound (SOUN), as I did listen to a 'Wainwright' interview SOUN's CEO, with questions cut-off from the streaming video at 18 minutes. I think it was a satisfactory even perfunctory interview, with no in-dept grilling I'd likely have posed. For-instance the CEO reiterated the guidance given trends of more revenue in Q3 and Q4 (unsure why he correlates that thusly, but ok). I don't know if he can deliver those results, given 'debt service', but perhaps. In time yes, that means 'probably' higher 2024 prices regardless of near-term.

I would have asked for affirmation that the Shelf Registration won't be used to further enhance the lifestyles of the Board or Founders, but solely growth or necessary Operations. Yes I think he could have answered that favorably as I have been told the complex financial engineering (as I termed it) of the past is the past (especially with a huge insider out of the picture), so I think analysts that won't pose that question are just 'wainwrong' instead of Wainwright (well a bit of humor, as I welcome their higher target... they and Dan Ives.. who just wished me well on my upcoming trip, expect 5 and 7 targets respectively).

'Market X-Ray' 

A challenging macro environment, neutral technicals for the S&P, and continued belief the Fed can't dare do much more, while the debt levels are so insanely bloated that there's no way Government can do a lot to control the budget, stop entitlements, or reduce indebtedness.

They'll surely try a bit, mostly talk. They might let the Banks take it on the chin at some point, however from an overall perspective it's what I'd said for years: they 'want' inflation to bail them out but at a limited pace, so as to repay debts with depreciated (Greenbacks) currency. The Fed should know that little office space resorption has occurred, hence default and delinquency risk persists. If one puts aside CPI, PPI etc., perhaps that's ought to be a real Fed inhibitor.

So, barring cataclysmic financial chaos, lots of talk and angina but they keep on debasing the currency, putting pressure on those with fixed incomes, and making lifestyles most citizens anticipated harder to maintain...especially older.

Bottom-line: 

The market is obviously neutral on Apple really and awaiting the CPI, for which I suspect the headline number (given Oil prices) will be higher, but Core will be 'friendlier', giving room for the FOMC to 'pause' at their next meeting. If so the market would probably have an initially favorable relief rise, but not with particular sustainability.

Technically working into a symmetrical pattern I also believe the market might be overreacting to Oracle's decline (from high levels but so can other stocks if similar slight disappointments occur). We follow but don't own Oracle, just a contender to improve their AI offerings, which is why we mention it. Warning implication: other stocks that ran too far ahead can be vulnerable too, then all will likely rebound notably into 2024. That's just market history lessons. In fact several pundits urge 'buying' Oracle (ORCL) or even SalesForce (CRM). I say too soon. The 'Cloud' and AI 'space' got overpriced in the big players, so they correct.

Anyway it's September not much has changed and the banking issues as well as debt concerns are still present. And I suspect won't change for a long time unless the economy tanks again. The Fed needs to fiddle with 'policy' not just rates more, and that's why they can drain the balance sheet separately.

Tomorow:

CPI and we'll see.

More By This Author: