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The European Union fined Apple $1.95B over the App Store’s regulations on music streaming. (0:16) Goldman Sachs has a Neutral rating on Super Micro, but the stock has surged to target levels. (4:02) A smaller Whole Foods Market Daily Shop store is opening soon. (4:35)
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Our top stories so far
apple(NASDAQ:AAPL) was fined 1.8 billion euros ($1.95 billion) after the European Commission said its App Store rules against music streaming providers, notably Spotify ( SPOT ), were deemed “abusive.”
“For a decade, Apple has restricted music streaming app developers from telling consumers about cheaper options available outside of their apps,” said EC executive vice president Margrethe Vestager.
“Apple does this by limiting the ability of app developers to inform Apple device users of alternative, cheaper options for purchasing music that are available online outside of the Apple ecosystem. This is illegal. It affects digital Millions of European consumers do not have the freedom to choose where, how and at what price they buy a music streaming subscription.”
Apple issued a statement on its website criticizing the decision. “This decision was made despite the Commission’s failure to find any credible evidence of consumer harm and ignores the reality of a booming, competitive and rapidly growing market,” the statement read.
Apple also singled out Spotify in its statement, noting that the Stockholm, Sweden-based company has 56% of the European streaming market and “has not paid Apple any fees for services that have helped them become the most well-known company in the world.” One of the brands”.
Also in Apple news, Evercore removed the stock from its Strategic Outperform list, citing December profits. Apple’s results beat expectations, but concerns about the company’s business in China weighed on it. Evercore said revenue in China fell 12% year over year as weakness in the region “is more concentrated in wearables and iPads – reflecting a soft consumer spending environment.”
They added that despite “disappointing (March quarter) guidance, we see iPhone sales being essentially flat.”
Apple also released new MacBook Air models in 13-inch and 15-inch screen sizes equipped with its own M3 chip. The new model is said to offer 18 hours of battery life, faster Wi-Fi 6E radio, 1080 HD camera, and support for up to two external displays.
Pricing starts at $1,099 for the 13-inch model and $1,299 for the 15-inch model.
In today’s transaction
The stock market started the week slightly lower, with the major stock indexes down less than 0.2%. But the stock market is poised for a historic rally.
“We are currently in the midst of a run that we may not see again in a lifetime,” said Deutsche Bank strategist Jim Reid. “The S&P 500 last week completed its 16th of the last 18 weeks of gains, which is First time since 1971. If this continues one week, it would be 17 out of 19 for the first time since 1964. It’s been a remarkable and relentless run.”
Treasury yields are moving higher. The 10-year interest rate is higher than 4.2%, and the 2-year interest rate is back above 4.6%. Traders had one eye on Federal Reserve Chairman Jerome Powell’s first testimony before Congress on Wednesday and the other on Friday’s jobs report.
Among active stocks
Shares of Sea Limited (SE) soared after the e-commerce company beat fourth-quarter earnings estimates. The Singapore-based company operates e-commerce platform Shopee, and its revenue increased approximately 4.8% year over year to $3.6B.
Sea Chairman and CEO Forrest Li said the company achieved full-year profits for the first time since its IPO in 2017.
JetBlue Airways (JBLU) shares rose after it reached an agreement with Spirit Airlines (SAVE) to terminate their $3.8 billion merger agreement in 2022. Spiritual stocks fell.
Under the agreement, JetBlue will pay Spirit a $69 million termination fee and all outstanding matters related to the transaction will be mutually announced. The deal was terminated after a federal judge blocked the merger of JetBlue and Spirit Airlines in January on antitrust grounds. Although the airline is appealing the decision, many experts believe it will be an uphill battle to get an appeals court to overturn the lower court’s decision.
Goldman Sachs initiated a neutral rating on Super Micro Computer (SMCI) stock. But the artificial intelligence server company’s stock price has exceeded Goldman Sachs’ $941 price target amid enthusiasm for its inclusion in the S&P 500 Index.
Analyst Michael Ng wrote that Super Micro is an “AI winner” because it has a large number of customers using GPU-dedicated servers, which have boosted its revenue and profitability over the past two years.
However, he said the stock is already fairly valued, trading roughly in line with Nvidia’s (NVDA) price-to-earnings ratio of 32 times.
In other noteworthy news
The Whole Foods grocery chain plans to open new smaller stores in urban areas to tap into new market segments. The new mini-stores will be called Whole Foods Market Daily Shops and will be between 7,000 and 14,000 square feet, while the average Whole Foods store is about 40,000 square feet.
The Whole Foods Market Daily Shop won’t have a salad bar or meat counter, but will offer many of the same products as a regular store, including fresh produce and frozen items. The first location is scheduled to open this fall on Manhattan’s Upper East Side. Whole Foods has signed a total of five leases for the concept in New York City and plans to explore expansion into other cities across the country. A nationwide rollout could pose a threat to Sprouts Farmers Market (SFM) and Trader Joe’s.
Whole Foods officials noted that the mini-stores will have cashiers, self-checkout stations and Amazon’s one-touch payment service.
Study Corner on Wall Street
Citi is investigating insider trading, noting that both buyers and sellers have retreated since the 2023 stock market rally.
“Interestingly, both (buy and sell) have historically been associated with forward performance at the index level,” strategist Scott Chronert wrote in a note. There is a certain relationship.” “Over the past decade, there has been a good correlation of 0.51 between the number of insider buyers and 12 million forward returns.”
“As for the number of insider sellers, there is some evidence that their timing is good, but the correlation is weaker at -0.17. Overall, there is a mixed signal as the weight of the insider buying indicator increases, which generally means more Low but positive forward return expectations.”
The team screened for companies with the highest insider trading volume as a percentage of market cap over the past six months.
Stocks with the most buyers include VF Crop (VFC), Carnival (CCL) and Enphase Energy (ENPH). Stocks with the most insider selling include NVR (NVR), Airbnb (ABNB) and Amazon (AMZN).
