Good morning! Inflation is the big news this week for market-watchers and investors — yet for almost everyone else it was the Apple event that happened Monday.

Luckily for us, there is a strong overlap between the technology world and Wall Street.

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Apple’s big day

To tech enthusiasts, Apple’s iPhone launch event is the biggest day of the year. 

To investors, it’s mostly a sell-the-news affair. 

On Monday, the company unveiled buzzy new features and tools tied to its “Apple Intelligence” line. The new iPhone 16 and iPhone 15 Pro will incorporate buzzy AI-powered capabilities that mirror some of what ChatGPT can do. 

Apple also announced new AirPods and Apple Watch, and an updated version of Siri, the digital voice assistant. 

Apple is the biggest company in the world — and so the highest weighted stock in the S&P 500 — yet Wall Street did not add to the event’s fanfare. 

Shares of Apple fell nearly 2% on the day, but ultimately finishing the day flat with a slight gain of 0.04%. 

Over the last 12 months, Apple and the S&P 500 have returned a nearly identical 21.86% and 21.81%, respectively.

The lack of a strong positive stock move on the day of Apple’s big event is not surprising by historical standards.

In fact, dating back to 2007 when the first iPhone debuted, Apple shares see an average decline of 0.3% during announcement days, according to Dow Jones data. 

And while investors do tend to treat the event as reason to sell the news, they typically pile back into the stock before the new products or software hits shelves later the same year. 

On average, the stock climbs 2.2% from the day of the announcement to the day of release, according to a Barron’s report.

That said, Apple hasn’t exactly been on a hot streak over recent months. 

In September alone the stock is down more than 5%, and this year it’s seen multiple sizable drawdowns. Meanwhile, Charles Schwab data shows its clients were net sellers of Apple in August. 

In 2023, the company’s revenue from iPhone sales saw a rare dip from the year before.

Sales have remained shaky this year, too, though analysts see those figures rebounding in 2025 as part of a widespread upgrade cycle.

“The new era of personalization and how consumers interact with their iPhones has now begun and we believe this will cause a renaissance of iPhone growth (high-single-digit growth upside) for Apple over the next 12 to 18 months and drive shares higher with a $4 trillion market cap in 2025,” Wedbush’s Dan Ives told clients late Monday.

After the event, his firm raised its price target on Apple to $300 from $285, about 36% above current levels.

What’s your outlook for Apple stock and its products? Hit reply to this email or let me know on X @philrosenn.

Elsewhere:

📱 Apple’s new product features made a splash. The iPhone 16 will have a bigger screen and improved battery, as well as a physical camera button. Plus, its new AirPods will see hearing-aid functionality and a smaller charging case, while the new, thinner Apple Watch will have sleep apnea detection. (CNBC)

🎙️ Trump & Harris debate tonight. The presidential candidates will face off at 9 p.m. ET in Philadelphia for a hotly anticipated televised event. Expect the two to trade barbs on economic policy related to tariffs, corporate taxes, and inflation. (Yahoo Finance)

📈 Stocks have a tough 8 weeks ahead. That’s according to Fundstrat’s Tom Lee, one of Wall Street’s most bullish forecasters. Despite his bearish short-term view, he still forecasts equities to run higher into 2025. Chief among his reasons is that he sees the US economy avoiding a recession. (Business Insider)

Rapid-fire:

• Zero-day options are tied to indexes like the S&P 500, but they could soon become available for individual stocks (WSJ)

• Morgan Stanley slashed its oil price outlook for the second time in a month, citing “demand weakness” (Yahoo Finance)

• Google’s advertising empire is under scrutiny as the US antitrust trial kicks off (Bloomberg)

• Companies issued record volumes of US debt this week as they brace for volatility around Fed cuts and the election (FT)

• China’s deflation problem continues to get worse, and it’s raised expectations for a policy intervention from Beijing (Bloomberg)

Last thing:

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