Earnings and events this week will shed light on the strength of North American consumers and major economies across Europe. Today, our spotlight is on Apple Inc., how those dynamics factor into its future – and why its newest features might represent a pivotal moment for the artificial-intelligence market. But first:
The outlook
On our radar and reading list
In a panic: Thousands of international students who came to Canada as temporary residents are worried about their future as a recent series of immigration policy changes has left them with no prospect of obtaining permanent residency.
Wealth coverage: PURE insurance, a U.S-based specialty property and casualty insurer, is expanding its operations into Canada, offering coverage to affluent Canadians who own homes valued between $2-million and $100-million.
Markets this week: The volatile activity that has marked September so far might not let up any time soon. Investors are on edge as key economic events this week could shape the tone for trading over the next couple of months.
Happening today
- Couche-Tard is keeping takeover talks alive with 7-Eleven operator Seven & i Holdings.
- Apple’s announcement is at 1 p.m. ET.
- Earnings include tech giant Oracle Corp.
Tomorrow
- Bank of Canada Governor Tiff Macklem speaks at the Canada-United Kingdom Chamber of Commerce in London.
- The first and likely only U.S. presidential debate between Donald Trump and Kamala Harris takes place in Philadelphia.
- Earnings include Petco Health and Wellness (stock ticker: WOOF).
In focus
Why Apple’s success is pivotal for the AI market
Apple chief executive Tim Cook on the red carpet at the Venice Film Festival last month.Louisa Gouliamaki/Reuters
Déjà vu?
If it feels like we’ve been here before, that’s because we have – for the most part. Industry watchers are expecting Apple’s presentation today to reveal iPhones and smart watches that don’t look much different compared with their forebears of last year, or even the year before.
Two reasons this time is different
Apple has already begun introducing features powered by “Apple Intelligence” into its hardware, but today’s announcement is expected to bring clarity to the rollout of major new AI-fuelled features, which will run only on iPhone 15 Pro and the newer models.
1️⃣ Bringing AI to consumers
One of the biggest concerns of late among investors around AI is that it hasn’t reached consumers in any meaningful way.
For all the talk of how this new technology heralds the beginning of the fourth industrial revolution – one that will reshape the world in every conceivable way – the companies making these ambitious declarations have yet to show us the goods. At least, enough to satisfy impatient investors.
- Apple’s approach so far seems to have been to highlight the features driven by its AI, rather than its more abstract abilities.
- Today, it will be interesting to see if chief executive Tim Cook keeps the focus on those offerings.
- Industry watchers are expecting an upgraded Siri that can generate recaps from long messaging chats (cc: my fantasy baseball thread that no longer has anything to do with fantasy baseball) and make decisions on your behalf, among other things. (Hmmm).
Apple Intelligence represents the company’s biggest attempt to bring AI to Main Street after Wall Street grew wary over the gap between promise and delivery.
If Apple impresses, it might jump ahead in the AI race – for now. But as this year has shown, the fortunes of AI companies are tied to each other: Nvidia sneezes and Meta falls 5 per cent. Maybe Apple’s rivals aren’t entirely rooting against Cook as he takes the stage today.
2️⃣ Different continents, different phones
The AI features might cross Apple’s ecosystem of products, but not Apple’s key global markets. Owing to regulatory changes, consumers in North America and Europe will be presented with two different offerings.
- In Europe: No new features powered by Apple Intelligence, but access to third-party applications.
- In North America: No access to third-party applications, but all of the features powered by its flagship new AI technology.
Hey, Siri: why the difference?
The EU’s Digital Markets Act, passed in 2023, put in place wide-ranging restrictions in an effort to ensure fair competition among the world’s tech giants.
One requirement of that act has drawn the ire of Apple and other tech heavyweights: “interoperability,” which means software needs to work across all operating systems.
- In Europe, which represents Apple’s second-largest sales market, that would mean giving consumers access to apps not available on the App Store.
- Apple argues that this requirement would force it to “compromise the integrity of our products in ways that risk user privacy and data security.”
OK, just tell me about the features:
Apple is hoping those AI upgrades will be enough to bring consumers off the sidelines after a few generations of iPhones that haven’t Changed Everything.
But industry watchers are also expecting:
- New colours, and new finishes rumoured to include rose and titanium bronze.
- New camera-lens design.
- Better battery life.
And the rumour I’m rooting for:
A new button, in addition to the action button introduced in iPhone 15, meant for capturing photos and videos.
- If this is true, I’m hoping Apple will build on this exciting “button” technology – possibly to the point where we have buttons for letters arranged in such a way as to improve our ability to type.
Also this week
Small vessels transfer tourists visiting the island of Santorini. Greece announced yesterday that it plans to impose a €20 levy on cruise ship visitors to the islands of Santorini and Mykonos during the peak summer season in a bid to avert overtourism.Alkis Konstantinidis/Reuters
Wednesday: The U.S. reports its core consumer price indexes for August and year over year. Earnings include Gamestop Corp. and Manchester United.
Thursday: The European Central Bank is expected to cut its key lending rate for the second time since June, and the U.S. sees more jobs data in the run-up to an expected interest-rate cut on Sept. 18. Earnings include Dollarama Inc. and Cracker Barrel.
Friday: Earnings include Sobeys Inc. owner Empire Company Limited and American retail giant Kroger Company.
Morning markets
Global markets were mixed as investors looked toward this week’s U.S. inflation data to gauge how far the Federal Reserve will cut interest rates. Wall Street futures and TSX futures were pointing higher after steep losses last week.
Overseas, the pan-European STOXX 600 was up 0.58 per cent in morning trading. Britain’s FTSE 100 gained 0.66 per cent, Germany’s DAX rose 0.52 per cent and France’s CAC 40 advanced 0.67 per cent.
In Asia, Japan’s Nikkei closed 0.48 per cent lower, while Hong Kong’s Hang Seng dropped 1.42 per cent.
The Canadian dollar traded at 73.72 U.S. cents.