Apple's Hardware and Local AI Push
Apple (AAPL) rolled out new Mac mini and Mac Studio models with upgraded chips, aimed at running AI locally to strengthen its standing with developers who build and run AI models and agents. The new Mac mini can be set up with Apple's first M6 chip. The Mac Studio gets M5 Max and M5 Ultra options, with Apple claiming up to 4.3 times faster AI performance in the new Studio. Shipments start September 22nd. The launch backs Apple's move to make on-device AI a bigger part of the Mac line, including the ability to link several Mac Studios together to run trillion-parameter AI models locally. This deepens Apple's push into hardware, expected to be a main focus of John Turnus's leadership.
Waymo Expands to Europe
Waymo, owned by Alphabet (GOOGL), is taking its robotaxi business to Europe. It plans to begin testing in Munich in the coming weeks and launch a fully driverless ride-hailing service there by the end of 2027. Waymo will first map Munich and test with trained specialists behind the wheel before getting the regulatory approvals needed for driverless commercial rides. Munich would be Waymo's first robotaxi market in the European Union. Germany wants to lead in autonomous driving and has already set up a legal framework for the technology. Waymo already runs commercially in 11 U.S. cities and is preparing to expand into 19 more at home, plus London and Tokyo, as robotaxi competition heats up. This follows Tesla's (TSLA) cyber cab announcement.
Weak Consumer and Housing Data
Two macro reports show Americans feel less confident about the economy amid high gas prices, inflation, and broad uncertainty. Preliminary Conference Board data showed the consumer confidence index edging down this month to its lowest since January. People's short-term outlook for jobs, income, and business fell, though their view of current conditions improved from the prior month. New home sales hit multi-month lows on affordability problems and high borrowing costs, with the pace the slowest since January. Over that stretch, mortgage rates jumped from around 6.1% to above 6.6%.
A corporate read on the consumer came from Dick's Sporting Goods (DKS), which flagged a tough market for shoes and clothes and cut its full-year guidance. That appeared to weigh on other consumer-facing stocks, with Nike (NKE) moving in sympathy.
Nvidia Earnings and AI Cash Flow Concerns
Nvidia (NVDA) reports tomorrow, called the "Super Bowl of earnings." Market on Close will run an expanded show until 5:00 p.m. Eastern to cover the report as it hits the wire. The street expects EPS of $2.09 on revenue of $91.85 billion; if both come in line, that marks close to 100% growth year over year.
Concerns remain about customer concentration as investors grow uneasy over whether big buyers can keep spending. Amazon (AMZN) and Alphabet (GOOGL) turned cash flow negative in the second quarter. Meta's (META) cash generation dropped about 90% from a year earlier. SpaceX and Tesla (TSLA) also had negative free cash flow in the recent quarter, as all of them fund AI ambitions.
PCE and Jackson Hole Ahead
The July PCE reading comes before the market opens tomorrow. Given the mild CPI and PPI prints, the number will likely hold steady. PCE is the Fed's preferred inflation gauge, making it an interesting setup going into Jackson Hole for Kevin Walsh on Friday.
