Barron's - USA (2020-10-12)

October 12, 2020 BARRON’S 13

PREVIEW

FOUR NEW IPHONES

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Monday 10/

U.S. bond markets are closed in

observance of Columbus Day, while

Canadian bourses are closed for

Thanksgiving.

The Annual Meetings of the Interna-

tional Monetary Fund and World Bank

convene virtually this year. The confer-

ence runs throughout the week.

Tuesday 10/

BlackRock, Delta Air Lines, Faste-

nal, First Republic Bank, and John-

son & Johnson report quarterly

results.

The National Federation of Indepen-

dent Business releases its Small Busi-

ness Optimism Index for September.

Consensus estimate is for a 100.9 read-

ing, slightly above August’s 100.2.

The Bureau of Labor Statistics re-

leases the consumer price index for

September. Expectations are for a 1.4%

year-over-year rise in the CPI, ahead of

August’s 1.3% gain. The core CPI,

which excludes volatile food and en-

ergy prices, is seen jumping 1.8%,

roughly even with the August data.

Wednesday 10/

Goldman Sachs Group, PNC Finan-

cial Services Group, United Airlines

Holdings, UnitedHealth Group, and

U.S. Bancorp report earnings.

The BLS releases the producer price

index for September. Economists fore-

cast an uptick of 0.2% month over

month, with the core PPI also gaining

0.2%. This compares with rises of 0.3%

and 0.4%, respectively, in August.

Medtronic hosts its biennial investor

and analyst meeting. Speakers will

include the firm’s CEO, Geoff Martha.

Thursday 10/

Intuitive Surgical, Morgan Stanley,

Truist Financial, and Walgreens

Boots Alliance hold conference calls

to discuss quarterly results.

The Department of Labor reports

initial jobless claims for the week end-

ing on October 10. Initial claims were

840,000 this past week, the lowest

level since mid-March.

The Federal Reserve Bank of New

York releases its Empire State Manu-

facturing Survey for October. The con-

sensus estimate is for a 12 reading, be-

low the 17 figure for September.

Friday 10/

Bank of New York Mellon, Citizens

Financial Group, J.B. Hunt Trans-

port Services, Kansas City South-

ern, Schlumberger, State Street, and

VF Corp. report earnings.

The University of Michigan releases

its Consumer Sentiment Index for Oc-

tober. Economists forecast a 80.8 read-

ing, similar to September’s 80.2.

The Census Bureau reports retail-

sales data for September. Expectations

are for a 0.8% monthly increase in

consumer spending, to $542 billion.

Excluding autos, sales are seen rising

0.3%, slower than August’s 0.7% gain.

Coming Earnings

Consensus Estimate Year ago

T

BlackRock(Q3) $7.64 $7.

Citigroup(Q3) 0.84 2.

Fastenal (Q3) 0.37 0.

Johnson &Johnson (Q3) 1.96 2.

JPMorganChase (Q3) 2.06 2.

More Earnings on Page M31.

Consensus Estimate

Day Consensus EstLast Period

T September CPI 0.20% 0.40%

September Treasury Budget -$119.5 bil -$200.1 bil

W September PPI 0.20% 0.30%

F September Retail Sales 0.80% 0.60%

September CapacityUtilization 71.8% 71.4%

September Industrial Production 0.60% 0.40%

October Michigan Sentiment - p 81.0 80.

Unless otherwiseindicated, times are Eastern. a-Advanced;

f-Final; p-Preliminary; r-Revised Source: FactSet

For more informationabout coming economic reports

• and whatthey mean- go to Barron’s free Economic
  Calendar at http://www.barrons.com

Third-quarter earnings season kicks off with reports

from Citigroup and JPMorgan Chase—two of the four

largest U.S. banks by assets. The others in the top four,

Bank of America and Wells Fargo, report on Wednesday.

Tuesday

Apple Enters

The5GWorld

We’re almost there. Investors have been anticipating the

arrival of the first generation of Apple 5G iPhones for

years now, and the big day—Oct. 13—has almost arrived.

The basics leaked months ago: four new 5G-capable

models, plus perhaps a few other hardware announce-

ments. The really interesting questions, however, can’t be

answered immediately—in particular, whether the new

phones will drive a “supercycle” like 2014’s iPhone 6

launch. The bulls think so. But global economic weakness

and reasonable doubts about whether 5G wireless will

dramatically change the consumer experience could hurt.

Deutsche Bank’s Jeriel Ong laid out his expectations in

a research note. Based on earlier rollouts, he estimates that

the new phones could go on sale the weekend of Oct. 23-25.

That would provide 10 weeks of sales in the December quar-

ter, but only a week of sales before Apple announces Sep-

tember-quarter earnings on Oct. 29, which makes providing

guidance difficult. (Apple hasn’t offered guidance since the

pandemic began.)

Ong notes that investors expect two iPhone 12s and two

iPhone 12 Pro models, with 5.4-inch, two 6.1-inch, and a

6.7-inch screen sizes. The two higher-end versions will

have three back cameras and a 3-D lidar sensor “that could

have augmented-reality applications and support new

games and use cases.” The two lower-end iPhones will

carry two back cameras. All of the new phones should

provide 5G connectivity. He also expects AirPods Studio

headphones to launch soon, and possibly details on Arm-

processor based Macs, and discounted services bundles for

new iPhone buyers.—Eric J. Savitz

A Revenue Machine

Apple has orchestrated annual

upgrades of its iPhone to drive

quarterly sales.

Sources: Statista; FactSet

AStockforHardTimes

Appleshareshavesoareddespitethe

pandemic and the recession.

Apple Quarterly iPhone Revenues,

2015to

Apple Stock, Year to Date

AAPL

2015 2016 2017 2018 2019 2020

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Illustration by Elias Stein