Barron\'s - 09.09.2019

September 9, 2019 BARRON’S 15

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QUIET TIMES FOR APPLE

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The Bureau of Labor Statistics releases its consumer

price index for August. The CPI is expected to rise

1.8% year over year, while the core CPI is seen gaining 2.3%.

Thursday

Monday 9/

Ctrip.com International reports

second-quarter earnings.

The Federal Reserve reports con-

sumer credit data for July. At the end of

June, total outstanding consumer credit

topped $4.1 trillion for the first time.

Tuesday 9/

GameStop, HD Supply Holdings,

and Zscaler report quarterly results.

The National Federation of Indepen-

dent Business releases its Small Busi-

ness Optimism Index for August.

Economists forecast a 103.5 reading,

down from July’s 104.7.

The Bureau of Labor Statistics

releases its Job Openings and Labor

Turnover Summary for July. Consen-

sus estimates are that there were 7.

million open jobs on the last business

day of July, up from 7.3 million in June.

Apple hosts a product launch event

in Cupertino, Calif. The company is

expected to unveil three iPhone 11

models.

Wednesday 9/

The BLS releases the producer price

index for August. Expectations are for

a 0.1% rise after a 0.2% gain in July.

The core PPI, which excludes volatile

food and energy, is seen increasing

0.2% after declining 0.1% in July.

Thursday 9/

Broadcom, Kroger, and Oracle hold

conference calls to discuss earnings.

The European Central Bank an-

nounces its monetary-policy decision.

The market expects the ECB to cut its

deposit rate from the current negative

0.4%. Futures markets predict a 50%

chance of a 10-basis-point reduction, to

negative 0.5%, and a 50% chance of a

20-bps cut, to negative 0.6%.

The Treasury Department releases

its monthly budget statement for

August. Consensus estimates are for a

$161 billion deficit, an increase from

July’s shortfall of $120 billion. The

Congressional Budget Office recently

projected a $960 billion deficit for

fiscal 2019, which ends in September.

That would be the largest since 2012.

H&R Block and Kraft Heinz hold

their annual meetings of shareholders

in Kansas City, Mo., and Pittsburgh,

respectively.

Mastercard and U.S. Bancorp host

investor days.

Friday 9/

The Census Bureau reports retail

sales for August. Economists forecast

a 0.1% gain, after a 0.7% jump in July—

the largest rise since March.

The University of Michigan reports

its Consumer Sentiment Index for

September. Expectations are for a

rebound to a 91 reading from Au-

gust’s 89.8 figure. The August data

was the weakest since late 2016.

TheWaitfor

5G Begins

Apple is expected to showcase a new generation of

iPhones at its Cupertino, Calif. headquarters on Tues-

day—and interest has rarely been lower.

Ahead of Apple’s “special event,” search data from

Google Trends reflects little excitement about the new

phone. Google searches for the term “iPhone” peaked in

September 2012, when the iPhone 5 was unveiled.

Though interest usually spikes around product an-

nouncements in September, the peaks have steadily de-

clined since 2016.

Consumers aren’t the only one’s feeling lukewarm

about the iPhone 11—fund managers are too, according

to Bank of America Merrill Lynch. In August, Apple’s

position in active stock funds dropped to its lowest level

since January 2016, the firm notes.

But this year’s batch of Phones is likely something of

a placeholder, with a 5G model expected to launch next

year. The 5G phone could supercharge the next upgrade

cycle, much as larger iPhones did in September 2014.

Apple’s current flagship iPhone XS starts at $999, but

a September survey by PiperJaffray showed that 23% of

iPhone owners would pay $1,200 to upgrade to a 5G

model. The demand is impressive, PiperJaffray notes,

given that consumers are just beginning to learn 5G’s

benefits, including faster speeds and more reliable ser-

vice in densely populated areas.

If the 5G iPhone commands a premium price, Wall

Street may be underestimating Apple’s future revenue.

This week’s reveal may be a snoozer, but don’t sleep

through 2020’s.—Connor Smith

Find My iPhone

Google search interest for ‘iPhone’

has steadily declined after peaking

around the iPhone 5 launch in 2012.

Wall Street’s View

iPhone sales are expected to fall, until

a 5G-inspired boost in fiscal 2021.

2010

Sept

’

Sept

’

Sept

’

Sept

’

2015

200

100

125

220

240 million

50

25

0

160

75

180

Source: Google Trends

Relative to peak value of 100

Source: FactSet

Day Consensus Estimate Year Ago

M

Casey’s General Stores (1Q) $2.03 $1.

T

Gamestop (2Q) 0.21 0.

W

Oxford Industries (2Q) 1.86 1.

More Earnings on Page M

Coming Earnings

Day Consensus Est Last Period

M July Consumer Credit $16.0 bil $14.6 bil

T July JOLTS 7,400,000 7,348,

W August PPI 0.1% 0.2%

July Wholesale Trade 0.2% 0.2%

TH August CPI 0.1% 0.3%

August Treasury Budget $-161.0 bil $-119.7 bil

F August Retail Sales 0.2% 0.7%

July Business Inventories 0.3% 0.0%

Sept Consumer Sentiment -p 91.0 89.

Unless otherwise indicated. a-Advanced; f-Final; p-Preliminary;

r-Revised

Source: FactSet

Consensus Estimate

For more information about coming economic reports - and

what they mean - go to Barron’s free Economic Calendar at

Elias Stein http://www.Barrons.com