Finimize - 🍎 Apple’s looking ripe

What’s going on here?

Apple’s toiling and tinkering led to expectation-beating results last quarter.

What does this mean?

Apple’s iPhone sales, the company’s pride and joy, staged a remarkable comeback last quarter, outshining a shrinking smartphone market and growing revenue compared to the same quarter last year. That rebound balanced out less-than-stellar sales of Macs and iPads – and while the ever-lucrative services segment (including Apple TV, Music, and iCloud) may not have exceeded expectations, it still managed to chalk up sales growth of 5%. All in all, Apple put in a solid performance, with folks using more of its products than ever before. And with a $90 billion share buyback program thrown into the mix, it’s no surprise relieved investors initially sent the stock up.

Why should I care?

The bigger picture: The Apple of my AI.

It’s AI-mania in the tech world these days, with heavyweights like Microsoft, Alphabet, and Amazon going all-in on uber-trendy artificial intelligence. And while Apple – the biggest of them all – seems to be playing it cool, it’s actually weaving a little AI magic into its own offerings, spicing up user experience and rejigging product use cases. There’s also plenty of AI under the hood of Apple’s self-driving car project – and the tech world’s abuzz with reports it’s working on an AI-powered health coach too.

For markets: Big Apple.

This has been a strong earnings season for Big Tech, with all the usual suspects smashing through analysts’ expectations. And with their cash-rich balance sheets also luring investors in a so-called “flight to safety”, last week Apple and Microsoft made up a bigger proportion of the S&P 500 than ever before. In fact, around half of the total gains clocked up by S&P 500 this year have been down to the two giants. And while that’s impressive, it’s risky too: any tumble in those titans’ values could rock the index to its core.

What’s going on here?

China's energy appetite is far from being sated, with data out this week showing the country’s using boatloads of oil.

What does this mean?

A nation guzzling down energy is a telltale sign of economic growth, and China’s latest data is nothing short of a blockbuster. At the end of last month, 125 supertankers were cruising their way to the world’s biggest oil importer – the most in over two years, according to Bloomberg. And if you think that’s impressive, buckle up: cargo data suggests that China hasn’t yet slaked its thirst.

But don’t imagine that it’s “all work and no play” in the Middle Kingdom. With Covid restrictions happily scrapped, China’s citizens embarked on a whopping 274 million domestic trips over the May Day break – a 20% increase from pre-pandemic levels. And because Mom and Pops always need a fridge-magnet souvenir, that helped push tourism spending back to 2019 levels too.

Why should I care?

The bigger picture: Beijing wasn’t built in a day.

Souvenirs aside, China’s economic comeback does seem a little uneven, with manufacturing activity recently shrinking for the first time in months. But let’s not get ahead of ourselves: the trajectory China’s charting is pretty similar to other nations’ post-lockdown recoveries, with services in demand and goods out of favor. Plus, the global economy’s in a bad way right now – so there’s little sense (and less money) in manufacturing products no one’s ordering. Goldman Sachs, at any rate, isn’t worried, betting that the dragon economy still has plenty of fire in its belly.

For markets: Fuel for thought.

Oil has taken a hit from that slowdown in manufacturing and the flagging US economy – meaning this week’s 8% slide in oil prices isn’t out of left field. But some hopeful analysts think the tides will turn before long, thanks to OPEC’s lowered oil production and an anticipated jump in demand in the second half of this year.