Apple (AAPL) is set to host its first product event of the fall, where the tech giant is expected to unveil a wide swath of products, including updates to three of its most popular product lines. The iPhone 14 is expected to be the star of the show, with Apple likely showing off four new versions of the iconic smartphone: a 6.1-inch model, a 6.7-inch model, a 6.1-inch iPhone 14 Pro and a 6.7-inch iPhone 14 Pro Max. Some analysts have forecast the new iPhone 14 Pro and iPhone 14 Pro Max to see a $100 price increase over last year’s models, which started at $999 and $1,099, respectively.
Bigger picture: Apple’s Pro models have been big profit drivers (accounting for 54% of revenue) since late 2020, when the company announced its first 5G-capable devices. “Around the world, 5G penetration is still low,” according to CEO Tim Cook, “so I think there’s reason to be optimistic.” Wedbush Securities has called the unveiling of the new iPhone family another “pivotal moment,” especially in light of the weakening global economy, while reports suggest the company could announce a new subscription plan that lets people pay for the device on a per-month basis.
In addition to the new iPhones, which are expected to have better cameras, video and processors, Apple is expected to unveil new versions of the Apple Watch, including one that is geared towards extreme sports enthusiasts. The new wearable, which is likely to compete with a similar offering from Garmin (GRMN), will have a larger display than previous watch versions, as well as a larger battery and a titanium casing. The tech giant is also widely speculated to unveil at least one version of its wireless earbuds, the AirPods Pro 2.
Grab the popcorn: The announcements will be streamed on Apple’s website, with the event, dubbed “Far Out,” starting at 1:00 p.m. ET. Investors will also be watching Apple’s stock price during the show, with shares going on a roller coaster ride since an all-time high of $182 in January. At the time of writing, Apple shares are largely unchanged at $154, with a market capitalization of $2.5T.
There has sure been a lot of choppy trading since the beginning of September, with the bears taking the bulls by the horns in an intense fight over market direction. Traders continue to assess market data – before the FOMC meeting at the end of the month – to see how far the central bank will go in its battle against inflation. The more positive the economic figures, the less the Fed will have to worry its aggressive hiking cycle will trigger a downturn… or so the thinking goes.
The latest: The S&P 500, along with the major indices, fell Tuesday for its seventh consecutive day of losses, marking the longest losing streak since November 2016. It followed an ISM survey that showed the U.S. services industry picking up for the second straight month in August due to increases in business activity, new orders and employment. The focus now turns to Fed Chair Jerome Powell’s speech tomorrow, after the central bank telegraphed that it would be extremely data dependent given a road ahead that’ll “bring some pain to households and businesses.”
Traders now see a 70% chance of a third 75-basis-point move in September, up from 57% a week ago, according to the CME Group’s FedWatch tool that measures pricing in the fed funds futures markets.
Commentary: “The Fed will be surprised by the growth damage caused by its tightening, in our view,” wrote analysts at Blackrock. “When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won’t be deep enough to bring PCE inflation down to the Fed’s target of 2%… That’s a big deal. We think getting inflation back to central bank targets means crushing demand with a recession. That’s bad news for risk assets in the near term.” (4 comments)
Juul Labs (JUUL) has struck a fresh settlement with 33 states and Puerto Rico that will see the once high-flying e-cigarette maker shell out $440M over a period of six to 10 years. The deal will resolve allegations that it marketed its products to underage users, and follows an investigation that began back in 2020. Juul already agreed to pay a total of $87M in settlements with four other states, and is fighting an FDA order from June that required the company to pull its products from the U.S. market.
Quote: “They relentlessly marketed vaping products to underage youth, manipulated their chemical composition to be palatable to inexperienced users, employed an inadequate age verification process, and misled consumers about the nicotine content and addictiveness of its products,” Connecticut Attorney General William Tong said at a news conference.
The terms of the deal include restrictions on youth marketing, paid product placement, advertising on public transportation, funding education programs, or using cartoon characters or people under 35 years old in advertisements. Juul also agreed not to advertise on billboards or use paid influencers to promote products, which will severely limit its marketing and sales practices.
Valuation up in smoke: Marlboro owner Altria (MO) bought a 35% stake in Juul for $12.8B in late 2018 to diversify its portfolio and join forces with a company that was threatening its traditional cigarette business. Things didn’t go so well, with the FDA banning flavored e-cigs in 2020, prompting JUUL’s market share to tumble from 70% to 42%, and then to 36% as of March 2022. Earlier this year, Altria valued its JUUL stake at $1.6B, an eighth of its original investment, and that’s before the FDA threatened its entire U.S. business (Altria shares are down 40% since the acquisition). (34 comments)
COVID-19 immunization will become an annual event similar to the yearly rollout of flu vaccines, according to top health officials in the U.S. The announcement didn’t come as a surprise to many as new Omicron boosters were just cleared by the FDA – under emergency approval – given the rapid mutation rate of coronavirus. Updates to the jabs were also approved before their human testing was complete – using data from earlier iterations of the shots and other sources – suggesting that the vaccines will be sticking around for a while.
Snapshot: The “bivalent” messenger RNA vaccines address both the original strain of the virus and Omicron subvariants BA.4 and BA.5, which together account for an estimated ~99% of circulating COVID-19 strains. “In the absence of a dramatically different variants, we likely are moving towards a path with a vaccination cadence similar to that of the annual influenza vaccine, with annual updated Covid-19 shots matched to the currently circulating strains for most of the population,” declared White House Chief Medical Adviser Dr. Anthony Fauci.
CDC Director Dr. Rochelle Walensky recently added that the seven-day average of COVID hospitalizations had dropped 14% to 4,500, and new vaccines could prevent as many as 100,000 hospitalizations and 9,000 deaths per year. She also forecasts that the shots could save billions in medical costs if people adopt them at the same level as annual flu vaccine coverage. Pharmacy retailers CVS Health (CVS) and Walgreens (WBA) announced the availability of Omicron-adjusted boosters last Friday.
Go deeper: People need to have completed a primary vaccination series to be eligible for the new boosters, and be at least two months out from their last dose of any COVID vaccine. The CDC also advises that one should consider waiting three months after recently having COVID (and testing negative) before getting an updated booster. However, Fauci pointed out that there may be situations where people with underlying medical conditions might have to get immunized more than once a year. (23 comments)
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