Morning Bid: Eyes switch to inflation vs elections, Powell up
A look at the day ahead in U.S. and global markets from Mike Dolan
After an intense month focused on election risk around the world, markets quickly switched back to the more prosaic matter of the cost of money - and whether disinflation is resuming to the extent it allows borrowing costs to finally fall.
Thursday's U.S. consumer price update for June is the key moment of the week for many investors - with the headline rate expected to have fallen two tenths of a percentage point to 3.1% but with 'core' rates still stuck at 3.4%.
With Federal Reserve chair Jerome Powell starting his two-pronged semi-annual congressional testimony later on Tuesday, the consensus CPI forecast probably reflects what the central bank thinks of the situation right now - encouraging but not there yet.
But as the U.S. unemployment rate is now back above 4.0% for the first time since late 2021, markets may look for a more nuanced approach from the Fed chair that sees it increasingly wary of a sudden weakening of the labor market as real time quarterly GDP estimates ebb again to about 1.5%.
There were some other reasons for Fed optimism in the lead up to the testimony.
The path U.S. inflation is expected to follow over coming years generally softened in June, amid retreating projections of price increases for a wide array of consumer goods and services, a New York Fed survey showed on Monday.
Inflation a year from now was seen at 3% as of June - down from the expected rise of 3.2% in May - and five-year expectations fell to 2.8% from 3%.
Crude oil prices are better behaved this week, too, falling more than 3% from the 10-week highs hit late last week and halving the annual oil price gain to 10%.
The losses on Tuesday came after a hurricane that hit a key U.S. oil-producing hub in Texas caused less damage than many in markets had expected - easing concerns over supply disruption.
Before Powell starts speaking later, there will also be an update on U.S. small business confidence for last month.
Could a $600 billion funding gap crush the AI industry?
On July 5, Microsoft co-founder Bill Gates appeared on the Next Big Idea podcast to discuss his vision for Superhuman artificial intelligence and technological progress. At the same time, it said that the enthusiasm of the AI market is far more than the Internet bubble. Gates believes that the current threshold for entry in the AI field is very low, and the entire market is in a fever period, AI startups can easily get hundreds of millions of dollars in financing, and even have raised $6 billion (about 43.734 billion yuan) in cash for a company. "Never before has so much capital poured into a new area, and the entire AI market has fallen into a 'frenzy' in terms of market capitalization and valuation, which dwarfs the frenzy of the Internet and automotive periods in history." Gates said. At this stage, the rapid development of the artificial intelligence industry is a veritable gold industry, and Nvidia's market value is therefore soaring, and the total market value reached 3.34 trillion US dollars on June 18 local time, surpassing Microsoft and Apple in one fell fell, becoming the world's most valuable listed enterprise. But in fact, doubts about the field of artificial intelligence have also risen one after another and have never stopped.
How to evaluate the product impact of the iPhone 16
At the Apple Developer Conference held earlier, the iPhone 16 series will be equipped with iOS 18 has been revealed. At the event, Apple showed off a series of convenient interactive experiences brought by Apple Intelligence, including a more powerful Siri voice assistant, Mail app that can generate complex responses, and Safari that aggregates web information. These upgrades will no doubt make the iPhone 16 line even more attractive. In order to use Apple Intelligence, a new feature of iOS 18, the iPhone 16 and 16 Pro series are equipped with A18 chips. An external blogger found in Apple's back end that the iPhone 16 series will use the same A-series chip, and the back end code mentions A new model unrelated to the existing iPhone. It includes four iPhone 16 series models, and the four identifiers all start with the same number, indicating that Apple is attributing them to the same platform. The new iPhone will have a stainless steel battery case, which will make it easier to remove the battery to meet EU market standards, while also allowing Apple to increase the density of the battery cell in line with safety regulations.
Explainer: How Boeing's Starliner can bring its astronauts back to Earth
WASHINGTON, June 24 (Reuters) - Problems with Boeing's Starliner capsule, still docked at the International Space Station (ISS), have upended the original plans for its return of its two astronauts to Earth, as last-minute fixes and tests draw out a mission crucial to the future of Boeing's (BA.N), opens new tab space division. NASA has rescheduled the planned return three times, and now has no date set for it. Since its June 5 liftoff, the capsule has had five helium leaks, five maneuvering thrusters go dead and a propellant valve fail to close completely, prompting the crew in space and mission managers in Houston to spend more time than expected pursuing fixes mid-mission. Here is an explanation of potential paths forward for Starliner and its veteran NASA astronauts, Barry "Butch" Wilmore and Sunita "Suni" Williams. THE CURRENT SITUATION Starliner can stay docked at the ISS for up to 45 days, according to comments by NASA's commercial crew manager Steve Stich to reporters. But if absolutely necessary, such as if more problems arise that mission officials cannot fix in time, it could stay docked for up to 72 days, relying on various backup systems, according to a person familiar with flight planning. Internally at NASA, Starliner's latest targeted return date is July 6, according to this source, who spoke on condition of anonymity. Such a return date would mean that the mission, originally planned for eight days, instead would last a month. Starliner's expendable propulsion system is part of the craft's "service module." The current problems center on this system, which is needed to back the capsule away from the ISS and position it to dive through Earth's atmosphere. Many of Starliner's thrusters have overheated when fired, and the leaks of helium - used to pressurize the thrusters - appear to be connected to how frequently they are used, according to Stich.
Record numbers of people are flying. So why are airlines’ profits plunging?
New York CNN — A record number of passengers are expected to pass through US airports this holiday travel week. You’d think this would be a great time to run an airline. You’d be wrong. Airlines face numerous problems, including higher costs, such as fuel, wages and interest rates. And problems at Boeing mean airlines have too few planes to expand routes to support a record numbers of flyers. Strong bookings can’t entirely offset that financial squeeze. The good news for passengers is they will be spared most of the problems hurting airlines’ bottom lines — at least in the near term. Airfares are driven far more by supply and demand, not their costs. But in the long run, the airlines’ difficulties could mean fewer airline routes, less passenger choice and ultimately a less pleasant flying experience. Profit squeeze Industry analysts expect airlines to report a drop of about $2 billion in profit, or 33%, when they report financial results for the April to June period this year. That would follow losses of nearly $800 million across the industry in the first quarter. Labor costs and jet fuel prices, the airlines’ two largest costs, are both sharply higher this year. Airline pilot unions just landed double-digit pay hikes to make up for years of stagnant wages; flight attendant unions now want comparable raises. Jet fuel prices are climbing because of higher demand in the summer. According to the International Air Transport Association’s jet fuel monitor, prices are up 1.4% in just the last week, and about 4% in the last month. Adding to the airlines’ problems is the crisis at Boeing, as well as the less-well-publicized problems with some of the jet engines on planes from rival Airbus. Since an Alaska Airlines Boeing 737 Max jet lost a door plug on a January 5 flight, leaving a gaping hole in the side of the plane 10 minutes after takeoff, the Federal Aviation Administration has limited how many jets Boeing can make over concerns about quality and safety. As a result, airlines have dramatically reduced plans to expand their fleets and replace older planes with more fuel efficient models. In some cases, airlines have asked pilots to take time off without pay, and carriers such as Southwest and United have announced pilot hiring freezes. In addition to the problems at Boeing, hundreds of the Airbus A220 and A320 family of jets globally have also been grounded for at least a month or more to deal with engine problems. Just about all the planes with those engines have been out of sevice for at least a few days to undergo examinations. And Airbus has also cut back the number of planes it expects to deliver to airlines this year because of supply chain problems. Problems for flyers For now, competition in the industry remains fierce: There are 6% more seats available this month compared to July of 2023, according to aviation analytics firm Cirium. And that’s helped to drive fares down — good news for passengers, but more bad news for airlines’ profits. Southwest announced in April that it would stop serving four airports to trim costs — Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York and Houston’s George Bush Intercontinental Airport. Many more cities lost air service during the financial hard times of the pandemic. While upstart airlines are driving prices lower for travelers, those discount carriers might not survive long term. As the major carriers are making less money, many of the upstarts are flat-out losing money.
WhatsApp's new feature will let Meta AI edit your photos for you
WhatsApp beta version 2.24.14.20 has a new feature that allows users to share photos with Meta AI. The AI chatbot will analyze uploaded images and provide information or context about the content. Users may be able to request specific edits to their photos directly through Meta AI, though the extent of this feature is still unknown. As the battle for AI dominance heats up, Meta is adding a new trick to its AI chatbot, Meta AI, which is already part of Facebook, Instagram, and WhatsApp. While Meta AI already has impressive text capabilities, such as replying to questions, suggesting captions, and holding conversations, users cannot currently share or upload photos to the Meta AI chat. WaBetaInfo has uncovered the exciting new feature in the WhatsApp beta for Android version 2.24.14.20. This feature will allow Meta AI to interact with photos shared by users, reply to photos, and even edit them. As shown in the attached screenshot, WhatsApp is testing a new camera button in the Meta AI chat, designed to function similarly to the camera button in regular chats. This addition will allow users to manually share photos with Meta AI, a capability that is currently unavailable. With this new functionality, users will be able to ask questions about their photos, presumably allowing users to ask the AI to identify objects or locations or provide context about the photo’s content. Moreover, the screenshot suggests that Meta AI will also offer the option to edit photos, enabling users to make changes to their images directly within the chat by sharing a prompt. The exact scope of this image editing feature remains unclear, leaving us to wonder if it will be limited to simple tweaks or if it will unleash a powerful AI-driven photo editing suite. The possibilities are both exciting and intriguing, and this feature could definitely be a big hit, especially if it performs as promised. While this new image-sharing feature would mean Meta will analyze and face-scan the photos you upload, the screenshot includes a disclaimer indicating that users will have the option to delete their photos whenever they want. As of now, it seems that the feature is still in development, so it might be some time before we finally get to see it roll out publicly. Recently, we also reported about WhatsApp working on an “Imagine Me” feature that would allow Meta AI to generate AI avatars of you based on a set of your photos. WhatsApp in our newsletters WhatsApp is a leading messaging app, keep up to date on the latest, and learn about more Android apps today!