Koshiro Kiyota
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Apple could face a DOJ antitrust suit as soon as March. (0:33) Amazon looks to improve its ‘Remarkable Alexa‘ for s subscription service. (1:40) J.P. Morgan CEO Jamie Dimon rips bitcoin again. (2:32)
The following is an abridged transcript
Apple (AAPL) is facing yet another legal battle from global regulators. The U.S. Department of Justice could bring an antitrust case against the tech giant as early as March. That’s according to Bloomberg.
Though the suit is expected to come in Q1, timing could slip as the Justice Department’s most senior antitrust officials have not yet signed off.
The probe would be centered around the restrictions that Apple has allegedly imposed on its hardware and software that hurt competitors. Spotify (SPOT) has previously filed an antitrust complaint in Europe and other companies, such as Life360’s Tile, which makes competing products to AirTags, and Beeper, have made similar complaints.
In addition, a U.S. appeals court on Wednesday ruled that a ban on imports of Apple Watches with blood oxygen sensors would be reinstated. They found no merits in the tech giant’s appeal over a patent infringement dispute with Masimo (MASI).
The ruling by the U.S. Court of Appeals for the Federal Circuit will lift the interim stay on the import ban of Apple Watches on Thursday at 5 p.m. ET. The ruling also means that the affected Apple Watch models cannot be imported while the iPhone-maker appeals the underlying ban issued by the International Trade Commission.
Amazon (AMZN) is improving the quality of its Alexa voice assistant to incorporate more sophisticated artificial intelligence. It’s hoping to launch a subscription-based service by June 30, Business Insider reported.
By developing the new Alexa with AI, Amazon hopes to create a voice assistant that gives more accurate and succinct answers over the current version, known internally as “Classic Alexa.” After testing the underlying voice technology — known as “Remarkable Alexa” — with 15,000 external customers, Amazon has found the results lacking.
The updated chatbot still deflects or gives inaccurate answers and struggles to answer “ambiguous customer requests that require the engagement of multiple services,” BI said.
The tech giant’s former hardware and devices boss Dave Limp said last year Amazon may have to start charging for a more advanced version of Alexa, given the high cost of running AI models.
JPMorgan Chase CEO Jamie Dimon reiterated his disdain for Bitcoin (BTC-USD), calling it a type of cryptocurrency that does nothing.
In a CNBC interview in Davos, Dimon said he would advise his clients not to get involved in Bitcoin or in any of the new ETFs that were approved last week.
“I hope this is the last time I’m talking about [bitcoin] with CNBC, so help me God,” Dimon said. “Just please stop talking about this (expletive).”
Dimon says: “There are two types [of crypto], there’s a cryptocurrency which might actually do something … and we can use it to buy and sell real estate, to move data, tokenizing things that you do something with, and then, there is [the other type] that does nothing.”
He called the other type “the pet rock,” such as bitcoin, and added that use cases for the crypto coins include fraud, money-laundering, tax avoidance and sex trafficking.
“Maybe $50-100 billion a year for that,” he said. “That is the end use case, everything else is people trading among themselves.”
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Boeing bags an order for 150 MAX jets from India’s Akasa Air
Looking to the markets, the major averages closed down on Wednesday, although off their lows thanks to some buying into the close. The S&P (SP500) and Nasdaq (COMP.IND) lost -0.6%, while the Dow (DJI) fared better, off -0.3%.
All 11 S&P sectors closed in the red, with Real Estate and Utilities the top losers.
Stronger-than-expected December retail sales figures pushed short-term yields higher and had traders reining in expectations for a Fed March rate cut.
UBS chief economist Paul Donovan says the market surprise at the strong retail figures was “weird,” noting that “some part of US retail sales data surprised positively every single month during 2023.”
“The US consumer is important in preventing a soft economic landing from becoming a hard economic landing. This data is still consistent with a soft landing this year. However, a soft landing requires a neutral monetary policy (stable real interest rates), not monetary stimulus — which makes the more extreme bets on US rate cuts unlikely.”
“Never go short the hedonism of the US consumer,” he adds.
In this morning’s trading, stock index futures are mixed, with Nasdaq 100 (NDX:IND) doing the best, but up less than +0.5%. Rates are easing back, with the 2-year Treasury yield (US2Y), which is most closely tied to the Fed rate, is moving back down toward 4.3%. And the odds of a 25-basis-point rate cut in March are settling back around 60%.
Deutsche Bank strategist Jim Reid says: “The big question for markets at the moment is whether 2024 to date is just an understandable hangover to an exceptionally good end to 2023 or a marker for a more challenging year ahead. I suppose our highest conviction thought so far this year has been that the least likely scenario would be the level of rate cuts priced in by the market occurring without a recession.”
“Such a scenario has felt completely out of place with history and still does.”
On the economic calendar the action is at 8:30 a.m. ET.
The January Philly Fed manufacturing index comes on the heels of a huge plunge in the Empire State Manufacturing Index. The forecast is for a rise to -7, still in contraction territory.
December housing starts and building permits. Economists expect a fall in starts to 1.462M, but a rise in permits to 1.48M.
And weekly initial jobless claims. The consensus is for a small rise to 207K. Claims have remained stubbornly low of late.
