🍏 Apple is Officially an AI Company

MARKET UPDATE

Good Morning Investor! It looks like Monster Beverages ($MNST) and Celsius Holdings ($CELH) woke up on the wrong side of the stock market bed. Monster’s shares took a 3.21% dip, while Celsius felt the burn with a 9.60% plunge after private data indicates a significant decline in sales along with a decline market share over the past three weeks. Meanwhile, Apple ($AAPL) shares slipped nearly 2% after revealing its latest AI features for iOS. It seems not everyone is excited about Siri getting smarter. On a brighter note, shares of cybersecurity titan Crowdstrike ($CRWD) soared over 7% as the company celebrated its inclusion in the S&P 500 index.

TODAY’S BIG HEADLINES

Apple is Officially an AI Company

Short Sellers Are Disappearing

Nobody Trusts Big Tech With AI

MEGA CAPS & AI

Apple is Officially an AI Company🍏

Too Little, Too Late: Monday morning saw Apple ($AAPL) attempting to shake things up with a splashy unveiling of new AI features in the next iOS update. However, the market yawned and shrugged, sending Apple’s stock down almost 2% by the end of the day. It seems Siri might need a pep talk.

Apple in the Spotlight: Apple’s latest tech carnival at WWDC 2024 was all about AI. The tech giant declared its official entry into the AI arena with a series of updates that aimed to dazzle but landed with a thud. Here’s what they rolled out:

• Apple Intelligence: Apple’s new AI system, Apple Intelligence, promises to know you better than your best friend. Powered by OpenAI’s ChatGPT-4o model, Siri can now commandeer your device to fulfill your every wish, making it the ultimate digital butler.

• Magic Money Transfers: Revolutionizing mobile payments, Apple introduced a feature allowing users to transfer money by simply tapping their iPhones together. Perfect for those moments when you need to split the bill without saying a word.

• Photo Fantasies and Emoji Madness: A photos overhaul, a new password manager, an AI-powered calculator, and custom emojis crafted by AI were also on the list. It's like Apple threw an AI-themed party, but the guests were too busy to notice.

Siri, the Know-It-All: Apple's latest AI integration is set to transform Siri into a multifunctional marvel, ready to handle tasks that would impress even the most jaded tech enthusiasts. With the power of ChatGPT, Siri can now find and use your ID documents to fill out forms, create and edit text and images within documents, and even touch up photos to remove unwanted objects or people, mimicking Google’s Gemini AI on Android. This makes Siri not just a helpful assistant but a digital wizard capable of managing files, enhancing photos, and providing information on your documents, all with simple voice commands. These upgrades, unveiled at WWDC 2024, promise to make Apple devices smarter and more user-friendly, revolutionizing how we interact with our technology.

The Grand Release: These AI goodies will be free and available this fall, but there’s a catch. Only iPhone 15 and above, and MacBooks or iPads with an M1 chip or newer, will get to join the AI fun. Older devices will have to stick with their current capabilities and perhaps a bit of envy.

MARKETS & MACROECONOMICS

Short Sellers Are Disappearing🤔

Bull Party Continues: It seems the stock market bears have decided to extend their nap this year, as US equities continue to hit new all-time highs. The US economy, despite a fiscal landscape that looks like a Jackson Pollock painting, remains strong and resilient. The potential for a “soft landing” is becoming more likely, much to the dismay of Wall Street bears who would prefer a bit more turbulence in their honey.

• The US stock market has been on a rampage for nearly two decades now, with just a couple of pandemic-induced hiccups along the way.

• During this time, the S&P 500 has added a whopping $30 trillion in market cap, translating to a roughly 450% increase since the lows of 2009. It's been a bull market marathon with no finish line in sight.

The Writing is on the Wall: Short selling is becoming the investing equivalent of spotting a dodo. This relentless bull market, not the meme stock drama, is making short selling look like a relic of the past.

• Case in point: Jim Chanos, the legendary short-seller, converted his hedge fund into a family office after its assets plummeted from $6 billion in 2008 to a mere $200 million. Talk about diving into the deep end!

• Moreover, funds with a penchant for shorting have seen their assets dwindle from $7.8 billion in 2008 to just $4.6 billion today.

• And Goldman Sachs reports that the median short interest in an S&P 500-listed company is just 1.7%—the lowest in over two decades. It's like short sellers are on the endangered species list.

Endangered Species: Amid the carnage, a few brave souls are still waving the short-selling flag. Hindenburg Research and Citron Research stand out as the last bastions of this dying art. These firms dig deep, unearthing corporate misdeeds and malfeasance. It’s not just about betting against stocks; it’s about uncovering the dirty secrets that companies would rather keep buried.

MEGA CAPS & AI

Nobody Trusts Big Tech With AI😠

Out With the Old, In With the Bold: Adobe ($ADBE) decided to dip its toes into controversy, releasing a terms of service update that ruffled more feathers than a molting parrot. This move, reminiscent of PayPal's ($PYPL) previous blunders, sparked a sizable outrage among customers. It seems big tech still hasn't learned that people don’t want their data used to train AI models without their explicit permission. The message is clear: hands off our data!

How it Unfolded: Adobe, the mastermind behind the Creative Cloud suite, notified users of a terms of service update stating that "we may access your content through both automated and manual methods." This legalese quickly went viral on Twitter/X, prompting users with significant followings to boycott Adobe products.

• TV food personality Alton Brown was one of the most notable voices, loudly proclaiming his company's departure from Adobe's services.

• The main concern? These new terms of service potentially breach confidentiality agreements like NDAs, allowing Adobe to snoop around where it shouldn't.

• Given the outcry, Adobe might just backpedal faster than a cyclist on a unicycle. For now, the company insists it doesn’t use user content to train its AI models, but trust in big tech is shakier than a Jenga tower in an earthquake.

More to Come: Adobe isn't the only one feeling the heat. Recently, OpenAI faced its own showdown with Avengers star Scarlett Johansson over ChatGPT's voice assistant using her likeness. It’s clear the public isn't ready to let AI waltz in and take liberties with their data and likenesses without a fight.

MORE NEWS

Additional market-moving events🌎

Finance Party Ending?: Major Private Equity players’ nerves are on edge at Lavish Industry Party. The pressure to return investors’ money back to them is becoming so intense it may spell a make-or-break moment for many general partners. (YH)

Two Steps to the Right: It’s become evident that Europe is swinging far-right after European Parliamental votes saw French President Macron’s party routed by Marine Le Pen’s far-right party and German Chancellor Olaf Scholz’s Social Democrats posted their worst result ever. (Bloomberg)

Tech Ultimatum: Elon Musk has take to X to voice his discontent with Apple’s latest OpenAI integrations into the latest version of IOS, stating that no employee working for one of his companies will be allowed to use an Apple device. (Deadline)

Japanese Carmaker scandal: Several major Japanese automakers have been accused of falsifying test data, with Toyota ($TM) dropping 5.4% last week, Mazda ($MZDAY) was down 7.7%, Honda ($HMC) 5.75%, Yamaha 2.2%, and Suzuki ($SZKMY) 0.3%. (CNBC)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500. Then on the 10th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,114.00 SEK (📉-15.12%)

• Hims & Hers Health: $21.62 (📈+49.41%)

• PayPal: $67.09 (📉-0.31%)

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