Analysts expect Apple to announce at its Cupertino, California, headquarters a new iPhone that folds open like a passport

International News via Reuters:

When new CEO John Ternus unveils Apple’s latest products on Wednesday, Wall Street expects him to show that the company can still deliver breakthrough hardware and a Siri virtual assistant capable of competing in the AI race.

Analysts expect Apple to announce at its Cupertino, California, headquarters a new iPhone that folds open like a passport. They said it could quickly emerge as the category leader in the nascent folding phone market, despite an expected price of more than $2,500 and having cameras and processors that may not lead the market.

The company has already announced a deep overhaul of Siri — in part by tapping Google’s AI tech behind the scenes — and that may prove to be Ternus’ first big success after years of delays. A successful revamp by the end of this year could give Apple a good chance of pulling even with longtime rival Google’s Gemini assistant, analysts said.

Investors have largely looked past Apple’s slow start in generative AI because of the company’s billion-plus device installed base and loyal customer base. Ternus now faces pressure to convince consumers that Apple’s devices are the best way to use AI, which could determine whether he inherits former CEO Tim Cook’s momentum or plays catch-up.

NEW PREMIUM IPHONES

Apple is expected to update its premium iPhone Pro and Pro Max devices but hold off on refreshing the iPhone Air and the base and budget lines until spring. The aim is to drive interest in the real star of this week’s show, the folding phone.

“Even with a $2,500 price tag, the Apple foldable is going to fly off the shelves, especially because Apple is excellent at creating an aura of exclusivity, luxury, and scarcity,” Nabila Popal, senior research director at IDC, told Reuters. Popal expects the phone to generate more than $45 billion in revenue for Apple by the end of next year, even as foldables overall remain a single-digit share of the phone market.

The main appeal of a folding phone is the sheer newness after nearly two decades of candybar-style phones. While Samsung, Google and China’s Huawei have sold folding phones since 2019, analysts expect Apple to benefit from entering late by solving key engineering challenges, such as a hinge that feels sturdy over thousands of uses and minimizing any crease in the screen when the device is open.

“They’ve seen what has worked and what hasn’t worked with their competitors,” said Anshel Sag, an analyst at Moor Insights & Strategy who has tested many folding devices.

NEW SIRI’S BIG MOMENT

Ternus’ key challenge will be persuading customers to adopt the new Siri and convincing them and third-party developers that Apple can keep pace with rivals such as OpenAI, which roll out big improvements every few weeks, while Apple has traditionally moved more slowly.

“If Siri still sucked, then he would have a much more difficult Wednesday,” said Carolina Milanesi of Creative Strategies. “Now they can comfortably say Siri is delivering and has value, but they need to just continue to work and make it better and keep up.”

Analysts say Ternus, who kept a low profile as hardware engineering chief for five years, is likely to focus on delivering powerful devices as a base to expand on-device AI.

But he faces a steep regulatory challenge, said Gene Munster of Deepwater Asset Management: Apple’s Siri update might take until 2028 to win approval in China and won’t initially be available in Europe due to a regulatory dispute.

“It matters a lot that they get the U.S. out in time because it builds the confidence that they can do something in Europe,” he said.

Reporting by Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and Cynthia Osterman

The changes mark the largest reduction in quality of service at the world’s most popular internet search engine in its 29-year search history

International News via Reuters:

Alphabet’s Google on Tuesday rolled out changes to its online search results in Europe to satisfy EU antitrust regulators, a move which it said will degrade users’ experience and ratchet up costs for European businesses.

The changes mark the largest reduction in quality of service at the world’s most popular internet search engine in its 29-year search history, Google official told Reuters.

Google said the EU pitched the changes as levelling the playing field for companies to advertise. However, Google said it sees that in reality the changes favour price comparison sites, also known as vertical search services (VSS), linked to sectors including hotels, airlines and restaurants, such as Expedia or Booking.com. They get more prominence in search results over companies in those sectors that are listed with just a link to their websites, telephone numbers and address.

The U.S. tech giant was hit with a €460 million ($534 million) fine in July for favouring its own services in shopping, hotels, transport and sports results in search results in breach of the EU’s Digital Markets Act seeking to rein in the power of Big Tech.

The European Commission gave it 60 days to comply with the DMA or risk periodic penalty payments of up to 5% of its total worldwide turnover.

The revamped search results will highlight one specialised search engine at the top of the page, followed by two others with fewer details while a carousel of hotels, airlines and restaurants for example will sit below them with key features such as real-time prices stripped out. The rankings will be determined by Google’s algorithm.

“To comply with DMA requirements, we’re making significant changes to Search in Europe,” Nick Fox, Google’s senior vice-president, knowledge & information, said in a statement to Reuters.

“These changes degrade the user experience for Europeans – boosting online intermediaries at the expense of local businesses, and removing helpful features people rely on every day. Users outside the EU will not be impacted by these changes,” he said.

Google said past changes to comply with the DMA led to a 30% drop in free, direct booking traffic to European businesses and the latest changes are expected to hit them.

The company said it has tested the changes with millions of users in Europe, which show a high level of dissatisfaction as they have to retype queries to find what they want.

Google has racked up total EU antitrust penalties of €10.38 billion over nearly two decades.

The EU fines drew fire from U.S. President Donald Trump who threatened to launch a probe into the bloc’s “robbing” of American companies.

($1 = 0.8611 euros)

Reporting by Foo Yun Chee; Editing by Susan Fenton

The thieves had taken two more paintings by the famous Impressionist artist, but dropped them in the gardens as police, alerted by alarms, arrived and gave chase

International News via Reuters:

Thieves stole two Renoir paintings from a museum in Cagnes-sur-Mer on the French Riviera on Tuesday after breaking in a little before 6 a.m. through a hole made in a garden fence, the local mayor said.

The thieves had taken two more paintings by the famous Impressionist artist, but dropped them in the gardens as police, alerted by alarms, arrived and gave chase, Mayor Bryan Masson said.

The most valuable works of Pierre-Auguste Renoir have fetched dozens of millions of dollars at auctions.

The two stolen paintings were “Madame Colonna Romano” and “Young Woman at the Well”, the municipality said. Both belong to Paris’ famous Orsay Museum and were on loan to Cagnes-sur-Mer’s Renoir museum.

“It’s Renoir’s, it is priceless, you cannot sell it like that,” the mayor told reporters in front of the museum.

The museum, set up in 1960 in Renoir’s mansion on a hill near Nice where he died in 1919, had on display a collection of 13 paintings by the master and some 40 sculptures, items of furniture and photographs.

Art thieves in Europe are committing more violent robberies and specialist gangs have been replaced by ad hoc ​opportunists recruited through social media, pan-European police body Europol said last month.

It cited as a prime example a heist at ‌the Louvre Museum in Paris in October last year, when thieves stole €88 million ($102.3 million) worth of jewels, such ​as Empress Eugenie’s tiara. Other French museums were also targeted in the past months.

“They are attacking all museums now, we must react,” Luc, a neighbour of the Renoir museum, told BFM TV. He was woken up very early by police arriving at the spot of the break-in. “It’s very isolated here,” he said, pointing at the quiet spot where the museum’s garden fence was cut out by the thieves.

($1=0.8605 euros)

Writing by Inti Landauro and Ingrid Melander; Editing by Alex Richardson, Clarence Fernandez and Alex Richardson

Brent crude futures hit their highest in six weeks, nearing $100 a barrel, after Yemen’s Iranian-backed Houthis attacked energy facilities and cities in Saudi Arabia

International News via Reuters:

The yen traded around seven-month highs on Tuesday and stocks fell after a volley of attacks on energy facilities around the Gulf drove oil to near $100 a barrel, while copper prices hit record highs.

Brent crude futures hit their highest in six weeks, nearing $100 a barrel, after Yemen’s Iranian-backed Houthis attacked energy facilities and cities in Saudi Arabia, highlighting the risk of the conflict spreading throughout the region and further complicating the supply of fuel to world markets.

The price of diesel has hit record highs and has almost doubled from where it was before the start of the conflict, as has gasoline, and even prices for physical crude for immediate delivery are well above futures prices, in a clear indication of the toll the conflict is taking on the global energy market.

A resurgence in inflation has knocked the equity market in the past few weeks, in large part because of the surge in bond yields to multi-year highs, which puts central banks under pressure to raise interest rates.

The European Central Bank is all but certain to raise euro zone rates by a quarter point on Thursday this week, while the chances of the Bank of Japan doing the same next week are intensifying, which has set the yen on course for its strongest rally in two years. 

Equity markets in Europe slipped, leaving the STOXX 600 down 0.2%, while futures on the S&P 500 were off 0.4% and those on the Nasdaq were down 0.1%, suggesting smaller losses for tech stocks when Wall Street reopens later after a long weekend.

YEN CARRY TRADES UNWINDING

U.S. inflation data on Friday could prove decisive in setting expectations for the outcome of the Federal Reserve’s meeting next week. Right now, money markets show traders are attaching a roughly 58% chance of a rate rise.

Oil stole the spotlight on Tuesday, but the yen’s surge may prove the bigger story for global markets. Because of its status as a low-yielding currency, traders have borrowed yen in earnest to fund purchases of higher-yielding assets across currencies, bonds and equities, a strategy known as the carry trade.

But with the BOJ preparing to raise rates, Japanese bond yields at or near record highs and capital beginning to flow home, that trade is starting to unwind. In 2024, the last time the yen appreciated this quickly and carry trades reversed, a surge in volatility battered global equities.   

In the last week alone, the yen has gained nearly 4%, its largest week-on-week increase since July 2024. On Tuesday, it was trading around 154.4, leaving the dollar roughly unchanged on the day.  

“Despite short-term fundamentals suggesting the move is overdone, it remains risky to stand in its way, particularly given the scope for further carry trade unwinding,” ING strategist Francesco Pesole said.

On the broader economic front, data showed Japanese real wages rose 2.4% in July from a year earlier, the biggest increase since May 2021.

“With wage growth going from strength to strength, the case for the Bank of Japan to hasten the pace of tightening is becoming increasingly compelling,” Capital Economics analysts wrote in a research report.

In commodities beyond oil, the price of copper hit a record high on Tuesday, as global supply tightened with the metal continuing to flow into the U.S. ahead of possible tariffs.

Three-month copper on the London Metal Exchange was up 1.1% at $14,673 a ton, having risen to as much as $14,694.

On the bond market, benchmark U.S. 10-year Treasury notes were yielding 4.8%, up 2 basis points on the day and not far off their highest since November 2023.

Additional reporting by Gregor Stuart Hunter in Singapore; Editing by Shri Navaratnam and Alex Richardson