Expected iPhone 15 should drive Apple’s installed base growth, Goldman Sachs says
Goldman Sachs is anticipating the release of the highly anticipated iPhone 15 model and a new iteration of the Apple Watch at Apple’s event next month. In a note to clients on Thursday, analyst Michael Ng expressed optimism about the potential for further growth in the iPhone installed base due to the ongoing investments in the iPhone 15 and the Apple ecosystem. Ng believes that market share gains and minimized churn will contribute to this growth. He also expects a shift towards higher priced models and potential price increases of $100 for the Pro models. Ng forecasts a 5% year-over-year iPhone revenue growth for 2024.
While there may be some supply chain constraints and macroeconomic challenges that could impact the upgrade cycle, Ng believes that the durability of the iPhone installed base and the minimal churn will ensure that demand is eventually fulfilled and will not significantly impact earnings power.
Stocks open higher
In other news, stocks opened higher on Thursday. The positive start to the day is attributed to various factors, including the anticipation of Apple’s upcoming event and the positive outlook for the technology giant’s products. Investors are also awaiting fresh insights on inflation from the release of the personal consumption expenditures price index.
Weekly jobless claims come in below estimate
The Labor Department reported on Thursday that initial filings for unemployment benefits totaled 228,000 for the week ended Aug. 26. This represents a decrease of 4,000 from the previous week’s level and is lower than the Dow Jones estimate of 235,000. The lower than expected jobless claims suggest a positive trend in the labor market and could contribute to the overall market optimism.
SkyWest adds 2% following Raymond James upgrade
Shares of regional airline SkyWest rose nearly 3% in premarket trading after Raymond James upgraded the stock to outperform from market perform. Analyst Savanthi Syth cited improved fundamental positions and the successful pass-through of higher pilot costs to partners as reasons for the upgrade. This upgrade reflects the positive performance of the airline industry as a whole and the stabilization of supply trends for pilots.
Palantir could struggle with A.I. execution, Morgan Stanley says
Palantir shares slid over 3% before the bell after Morgan Stanley warned about potential difficulties in monetizing artificial intelligence. Analyst Keith Weiss expressed concerns about the execution of Generative AI initiatives and emphasized the need for tangible revenue contribution from these initiatives in the coming months.
Fed’s Bostic says rates are high enough
Atlanta Fed President Raphael Bostic stated on Thursday that he believes monetary policy is appropriately restrictive and that further tightening may not be necessary. Bostic cautioned against tightening too much and risking unnecessary economic pain but clarified that he does not support easing policy anytime soon.
Treasury yields dip as investors await fresh inflation insights
U.S. Treasury yields fell on Thursday as investors looked forward to the release of the personal consumption expenditures price index, which is a key inflation gauge for the Federal Reserve. The 10-year Treasury yield and the 2-year Treasury yield both experienced slight decreases as investors anticipated the inflation insights provided by the index.
European equity markets open higher
European markets opened higher on Thursday, with the pan-European Stoxx 600 up 0.1% at the start of trading. Financial services led gains with a 1.2% uptick, while food and beverages experienced a 0.5% drop.
China’s manufacturing PMI contracts again in August
China’s factory activity contracted for the fifth consecutive month, with the official manufacturing purchasing managers index coming in at 49.7 in August. Although this contraction was smaller than expected, it suggests ongoing challenges for the manufacturing sector in China. Non-manufacturing PMI also weakened for the fifth straight month, while the composite PMI saw a slight increase.
South Korea’s industrial production contracts for 10th straight month; retail sales fall in July
South Korea’s industrial production contracted for the tenth straight month in July, falling 8% compared to the previous year. This was steeper than economists’ expectations and reflects ongoing challenges for the country’s manufacturing sector. In addition, retail sales in July declined by 3.2% from the previous month, reversing the previous month’s rise.
Japan retail sales jump more than expected in July
In contrast to South Korea, Japan’s retail sales rose more than expected in July, increasing by 6.8% compared to the previous year. This exceeded economists’ expectations and indicates positive growth in Japan’s retail sector.