📱 Apple AI

Good morning investors! Earnings season is in full swing so let’s see what we have on the plate.

Today we cover:

• Apple AI

• McDonald’s earnings

• The cost of owning a dog

📊 Economy and News 

Apple goes AI

Apple introduced the inaugural version of Apple Intelligence on Monday.

This innovative software debuted in the developer beta of iOS 18.1 and is currently accessible exclusively to registered Apple developers who pay an annual fee of $99.

Investors anticipate that the seamless integration of AI into Apple’s operating system will drive significant upgrades in the coming years, particularly as the system is compatible only with the iPhone 15 Pro, iPhone 15 Pro Max, and newer models.

The preview released on Monday includes:

• A new Siri look that makes the edge of the phone glow

• Other Siri improvements, such as the ability to understand commands when the speaker stumbles over their words

• Siri can now answer troubleshooting questions about Apple products

• Better photos search and movie creation

• AI-generated summaries for Mail, Messages, voicemail transcriptions

• Writing Tools, Apple’s text-generation service

The preview does not include everything in Apple Intelligence the company demoed at its annual developers conference in June.

Some more features are expected to be rolled out soon, including:

• Image generation

• Emoji generation

• Automated photo clean up

• Other Siri improvements, including its ability to use your personal information, and the ability to take actions inside apps

• OpenAI ChatGPT integration

Apple revealed that the two AI models powering Apple Intelligence were pretrained on Google-designed chips in the cloud.

These chips, known as Google's Tensor Processing Units, were originally developed for internal use but are now gaining broader adoption.

Apple's choice to use these chips indicates that some major tech companies might be exploring and utilizing alternatives to Nvidia's graphics processing units for AI training.

Global hits:

• AT&T, other phone companies sued over stolen nude images could face liability after court ruling.

• U.S. crude oil falls nearly 2% as traders unfazed by Israel-Hezbollah escalation.

• UK finance chief says public finances show $28 billion spending hole, cuts road and rail project.

Sad news: More than half of American renters who want to buy a home fear they’ll never afford one.

📈 Stocks

S&P 500 5,463.54 (+0.081%)
DJIA 40,539.93 (-0.12%)
NASDAQ 17,370.20 (+0.071%)
BRENT CRUDE 79.78 (-1.71%)
* Prices as of Jul 30th, 12:20 AM UTC

McDonald’s disappoints

McDonald’s missed second-quarter earnings and revenue estimates.

Company executives acknowledged that diners considered their prices too high and said that they are taking a “forensic approach” to evaluating value offerings and working with franchisees to make the necessary adjustments.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: $2.97 adjusted vs. $3.07 expected

• Revenue: $6.49 billion vs. $6.61 billion expected

The fast-food giant reported second-quarter net income of $2.02 billion, or $2.80 per share, a decline from $2.31 billion, or $3.15 per share, the previous year. Excluding charges related to the future sale of its South Korean business and other items, McDonald’s earned $2.97 per share.

Quarterly revenue was $6.49 billion, roughly unchanged from the same period last year.

McDonald’s same-store sales decreased by 1%, falling short of StreetAccount's forecast for a 0.4% increase. This marks the first decline in companywide same-store sales since the fourth quarter of 2020.

In the U.S., same-store sales fell by 0.7% for the quarter. A year earlier, McDonald’s reported U.S. same-store sales growth of 10.3%, driven by the popular Grimace Birthday Meal.

Over the past year, more consumers have reduced their restaurant spending, especially at fast-food chains, which they no longer perceive as offering good value. McDonald’s noted a decrease in foot traffic to its U.S. restaurants during the quarter.

The company's recent $5 value meal initially succeeded in attracting lower-income customers back to stores but has not yet led to increased sales, according to company executives.

Flying lower: U.S. airlines are cutting their growth plans for the second half of the year. Over the last week, airlines shaved a point of capacity off their growth plans for the fourth quarter, according to Deutsche Bank. Money-losing low-cost airlines are under increasing pressure to cut growth plans and cull unprofitable routes.

💵 Personal Finance

The cost of owning a dog

Yesterday, we highlighted the one-time cost of buying a pet that goes up to $1,000 for traditional animals. Now, let’s move to yearly costs:

Food: Expect to spend about $120 to $1,000 on food. The amount, however, may go up or down based on the size of your pet and the type and brand you purchase. Most dog owners in the US with large dogs, for example, spend $446 on food per year.

Treats and toys: We understand you’d want to spoil your pet so get ready to shell out anywhere from $20 to $100 per year on toys and treats.

Insurance: Pet insurance can help you save money but it can cost a lot – up to $360 for cats and up to $1,000 for dogs – based on your dog's overall health, age, location, and other such factors.

Medical expenses: Medical expenses include routine medical expenses, such as visits to the vet, dental care, and vaccines. Insurance may cover some of these expenses but not all. Also, it doesn't include big surgeries.

Based on this, we can say that it costs anywhere from $2,000 to $4,000 per year to own a pet. According to this report, the average lifetime cost of owning a dog stands at $28,801. It goes over $30,000 in 13 states. The amount, however, is lower in developing countries such as Turkey and Brazil.

So, what to do? It’s expensive to keep a pet but we can’t neglect the pros of having one. So, have a look at your financial situation and see if you can afford to own a pet. A lot of pets are being given up by people who can't afford to keep them. Ensure you do not end up in such a situation by creating and sticking to a pet budget.

Check this video for more insights:

💰 Be a Better Investor

Resources:

• Make Money in Retirement

• Side Hustle Ideas

• Stock Deep Dives

• Investing 101 videos

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

Advertise with Us