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Good morning investors! The market jumped yesterday with most sectors closing higher.

Today we cover:

• A big rate cut?

• The new iPhone and more

• Investing in war

📊 Economy and News 

Don’t worry about a big rate cut, say analysts

According to analyst Michael Yoshikami, the U.S. Federal Reserve could implement a substantial 50 basis points rate cut next week without alarming the markets.

Yoshikami, CEO of Destination Wealth Management, suggested on Monday that such a significant reduction would signal the Fed's willingness to act decisively without indicating deeper economic concerns.

His views echo those of Nobel laureate Joseph Stiglitz, who advocated for a half-point rate cut at the Fed’s upcoming meeting. Stiglitz criticized the previous rate hikes as “too aggressive, too quickly.”

With the Federal Reserve meeting scheduled for September 17-18, a rate cut is broadly anticipated, though the exact size remains uncertain. The recent weak jobs report heightened concerns about a slowing labor market, briefly pushing expectations towards a larger cut before stabilizing.

Currently, traders see about a 75% chance of a 25 basis points reduction in September, with the remaining 25% factoring in a 50 basis points cut.

Yoshikami acknowledged that a larger cut might heighten recession fears, but he dismissed these concerns as exaggerated, pointing out that both unemployment and interest rates are low historically, and corporate earnings remain robust.

Global hits:

• China’s property market has ‘not found a bottom’ yet, Standard Chartered CEO Bill Winters says.

• Draghi urges radical European Union reform requiring extra 800 billion euros a year.

• Losses from crypto scams grew 45% in 2023.

Surprising: Morgan Stanley cuts oil forecast, says traders are pricing in a demand slowdown similar to mild recession.

📈 Stocks

S&P 500 5,471.05 (+1.16%)
DJIA 40,829.59 (+1.20%)
NASDAQ 16,884.60 (+1.16%)
BRENT CRUDE 71.10 (-0.01%)
* Prices as of Sep 10th, 12:20 AM UTC

Apple announces iPhone 16, Apple Watch Series 10, AirPods 4 and more

Here’s everything you need to know:

iPhone 16

Apple has introduced the iPhone 16, designed from the ground up to leverage Apple Intelligence. Key features include:

• Materials and Size Options: Aerospace-grade aluminum and 85% recycled content. Available in two sizes: 6.1 inches (iPhone 16) and 6.7 inches (iPhone 16 Plus).

• Customizable Action Buttons: Personalize functions like flashlight or calendar.

• Enhanced Camera Control: Instant access and adjustable camera settings with a single click.

• A18 Chip: Equipped with a new A18 chip, optimized for large generative models with a 2x faster neural engine. The chip uses 3-nanometer technology, four efficiency cores, and delivers up to 60% faster CPU performance and 40% faster GPU performance compared to iPhone 15.

The new iPhone 16 will start at $799, the company said. The iPhone 16 Plus will start at $899.

AirPods

• AirPods Pro 2: Introduces three new health features, including a clinical-grade hearing aid. Features hearing protection turned on by default and a personalized hearing profile for music, movies, and calls. FDA clearance is anticipated soon.

• Updated AirPods Max: Now available with USB-C charging and in three new colors: orange, purple, and starlight. Priced at $549, preorders start Monday with a launch on Sept. 20.

The new AirPods 4 will cost $129 and AirPods 4 with the active noise cancellation feature will be slightly more expensive at $179.

Apple Watch

• Apple Watch Ultra 2: Claims the "most accurate GPS in a sports watch," ideal for workout enthusiasts. Features include:

  • Depth gauge for scuba diving

  • Dual-frequency GPS and advanced positioning software

  • Custom workouts and automatic stroke detection for swimmers

  • Advanced compass app with offline maps and turn-by-turn directions

  • Priced at $799, available for preorder now and launches on Sept. 20.

• Apple Watch Series 10: Will be capable of alerting users to sleep apnea.

Competition

Other tech companies are also making headlines. Huawei has received over 2.7 million pre-orders for its new trifold smartphone, the Mate XT, which began pre-orders on Saturday.

Despite the announcement from Apple, the stock remained flat jumping only +0.041% after spending much of the day in the red.

Controversial: Google’s search business was deemed a monopoly. Now its ad business is on trial.

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💵 Personal Finance

Is war a good time to invest? - Part I

This isn’t a topic that we wanted to cover but it seems to be the need of the hour given the current situation in Ukraine and Israel. Some experts think this war will escalate soon, so in this currently unpredictable situation, would it be wise to invest in stocks?

There is no one answer to this question as it depends on several factors, including your investment goals, risk tolerance, time horizon, and the specific circumstances surrounding the conflict.

Here are a few things to consider:

1. Diversification: Diversifying your investments across various asset classes, including stocks, bonds, real estate, and commodities, can help spread the risk.

2. Long-Term Perspective: Investors looking to invest money for a good few years usually do not have to worry about the changing geopolitical situation as they will not have much of an impact on your portfolio. Historically, markets have shown resilience and the ability to recover from geopolitical crises over time. But, it can take a while.

3. Risk Tolerance: Assess your risk tolerance. Geopolitical conflicts can introduce uncertainty and volatility into financial markets. If you are uncomfortable with the potential for significant short-term fluctuations in the value of your investments, you may want to consider a more conservative allocation.

4. Research and Analysis: Stay informed about the specific conflict and its potential implications for the global economy and financial markets. Things are changing rapidly these days. Nobody expected the Palestine-Israel conflict to escalate like this and now some experts believe Iran might jump on the bandwagon, which may push oil prices, thus impacting the global economy. Analyze how the conflict may affect industries, companies, and regions where you have investments. Keep an eye on what others have to say but don’t be very quick to jump the gun.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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