VIDEO: From Apple’s Foldable iPhone to Fed Rate-Hike Odds: 5 Things Investors Need to Watch This Week

We may have a shortened trading week, but it will be a busier than usual one and that has Chris Versace sharing with you what the Pro Portfolio will be focused on this week.

From Apple’s (AAPL) Surprise and Shine event tomorrow, to what Portfolio holdings say at the Citi Global TMT Conference and Goldman Sachs Communacopia conference today through Wednesday, we’ll be watching.

We also share our thoughts on this week’s CPI and PPI data for August, and why, as of now, we’re leaning toward a Fed rate hike later this month.

Transcript

Hey everybody, Chris Versace here. It’s Tuesday, September 8th, and if you saw the Wall Street Journal’s big headline today, then you know summer is over and it’s back to serious business for Wall Street — and, of course, the Pro Portfolio. Given the Labor Day holiday, and I hope you had a great one, that means we have four trading days this week. But once again, as we tend to see, it means we’re really going to compress five days’ worth of developments into four. And believe me, this time around we have a jam-packed schedule for those four days. We’ve got the start of investor conference season, a lot of data points coming our way, Apple’s big event, and later in the week the August CPI and PPI data. Let’s break it all down.

One of the things we talked about in Friday’s roundup was the importance of these investor conferences. Just think about the timing — we’re a little more than two-thirds of the way through the current quarter. Management teams will be sharing what they’ve seen and learned over the preceding weeks, potentially updating their outlook for the balance of the year and for the current quarter. We’ll be listening for that, and we’ll also be paying close attention to any companies that might be resetting their guidance with a little over three weeks to go in the quarter. As for the conferences we’ll be focusing on this week, we have the Citi Global TMT Conference and the Goldman Sachs Communacopia + Technology Conference. Both start today and run through the next couple of days.

Who do we have presenting from the portfolio? Today we’ve got Applied Materials at the Citi conference, and Arista Networks, Google, and Axon at the Goldman conference. With Applied Materials, what will we be listening for? What’s the demand environment — is it accelerating? What’s happening with pricing — is Applied starting to see even more favorable pricing developments? If they do, that tells us a couple of things. First, that the demand environment is solid and tightening; if not, they wouldn’t be able to get better pricing. Second, to the extent pricing is improving, that suggests there could be incremental upside for Applied Materials’ margins in the coming quarters. Remember, better pricing in the backlog translates to higher margins and better earnings once that backlog converts to revenue, profit, and cash flow. So we’ll be paying very close attention to that.

With Arista Networks, we know demand is strong given what we’ve heard about AI and data center capital spending. But what is Arista saying about capacity constraints and its ability to overcome them? If they can — and if that’s what they telegraph — that would mean a quicker conversion of their backlog, or RPOs, into bookable revenue. That would suggest current consensus expectations for Arista’s revenue, and maybe its profits, are a little understated.

With Google, remember where we are relative to the midterm elections. We’ll be very curious what management has to say about the advertising spending environment, which is expected to be robust — even more so than the last presidential election. We’ll also want to hear from Google about its chip plans, especially following its recent tie-up with Marvell, and of course what they have to say about AI adoption. What does that mean for capacity at Google Cloud, and what could be some levers for incremental capex beyond what they’ve already announced?

With Axon, we want to pay close attention to what’s said about AI adoption in the core public safety market. But we also want to hear about drones, and about any uplift given all the negative headlines we’ve seen of late for Flock.

Tomorrow we’ll have Axon at the Wolfe Research Conference. We’ll be listening for much the same thing, though probably focusing less on the canned presentation and more on the Q&A session, where analysts might recraft their questions based on what they heard today to get a little closer to what they want to know — so the Q&A tomorrow should be a bit more insightful for us. Also tomorrow, at the Goldman conference, we have Applied Materials, where the same comments apply, and we have Microsoft presenting.

With Microsoft, remember the management team just resegmented the business, which we think is a positive move — it really shows the difference between Microsoft today and where it’s headed, compared to where it was ten, arguably fifteen, years ago, when it was more of a software company and not the AI infrastructure company it is now. With that in mind, we’ll be listening for what’s said about AI adoption and usage, capacity, and the ability of oncoming capacity to allow Microsoft to accelerate its revenue — along with any initial color on capex plans, not just for the coming year but for the next several years, as they address longer-term AI adoption and capacity needs.

Wednesday, we’ve got Nvidia at the Goldman Communacopia conference, and Arista Networks and Microsoft at the Citi conference — we’ll be listening for similar things from Arista and Microsoft. With Nvidia, the company recently reported, so we’ll want to understand a little more about the puts and takes to the 70% year-over-year top-line growth for fiscal 2028 that Jensen Huang guided to — what could allow for some upside there — as well as what we’re hearing about the ramp of the new chipsets and what that means for margins. That’s more of a quick update, given the proximity to Nvidia’s recent earnings report, but we’ll also want to tie in learnings from Dell, HPE, and Foxconn, which tipped its hand this morning by saying the third quarter will be stronger than expected.

When we think about Foxconn, that’s a pretty interesting segue to smartphones, and of course Apple, which is holding its big event tomorrow — the Surprise and Shine event, where we’ll see the latest iPhone 18 Pro models and the long-anticipated foldable iPhone. I’m very curious to see what’s different about the new Pro models, especially the price points. But with the foldable, I think the price point is going to be key. I also think Apple will go out of its way to showcase the different form factor and how it’s separate and distinct from the other foldables that are out there — and we have seen more foldables recently announced, so this will be Apple’s time to shine. For me, though, the real question is showing how someone can actually use the foldable, compared to, say, a combination of an iPad — particularly an iPad mini — and an existing iPhone. What kind of productivity can we get out of it?

I think that’s going to be key to converting people, especially since the price point is likely to be higher than previously expected. Earlier this year, before the big memory crunch, the chatter was around $2,000 for the base unit. We could see it come in higher than that — $2,500 for the base unit — and as you ramp up memory and other features on the iPhone, it could get more expensive still. But I’ve said before that I think Apple’s timing with its Apple upgrade program — the leasing program it struck with Klarna — is very smart. The program lets you spread your payments out, so instead of facing a big upfront expense, you can spread it across a multitude of payments, which could be just enough to make it work — if Apple can wow consumers with the foldable, the new iPhone 18 Pro models, and how it showcases iOS 27, Apple Intelligence, and the revamped Siri AI. That could drive an accelerated upgrade cycle for the iPhone, which of course is the biggest business inside Apple.

So tomorrow’s event is arguably very important. If Apple can wow, that rethink will start to happen. If Apple isn’t able to do that, we might see the shares trade off — remember, expectations are typically pretty high going into these events, so we do tend to see shares fall off regardless. But for us, it’s going to come down to whether or not Apple can wow the consumer. As part of that, we also remember that tomorrow’s event is John Ternus’s coming-out party as CEO.

Will his presentation style be closer to Steve Jobs, or closer to Tim Cook, who arguably relied over the years on canned presentations and a cast of characters to do the heavy lifting? Steve Jobs, if you remember, was a masterful presenter who did the entire presentation himself. We’ll look to see which format Ternus adopts, but we’re more interested in the substance — what Ternus has to say about Apple in terms of product innovation, vision, and where the company might be investing for the future. So we’ll be very focused on his forward-looking comments as he looks to lead Apple into its next evolution, including how AI fits into that. That’s something we’ll be paying close attention to.

After Apple’s event, we’ll be getting the August CPI and PPI data. What do we know so far? In our opening comments today, we discussed the continued rise in oil, copper, and food prices. And if you remember our comments from last week, the ISM August PMI pricing data pointed to sticky, higher inflation. Put it all together, and when we look at these reports and other data points, it tells us the Fed should be leaning toward a rate hike. Now, on Friday, President Trump threatened to impact trade if the Fed doesn’t deliver a rate cut later this month. I think we’re seeing new Fed chair Kevin Warsh in a genuinely tight position, because he’d have to come out and justify a potential pause, let alone any rate cut.

With the data we have, I think the market is right on this one, subject to what we see in the August CPI and PPI later this week. If there’s a particular drop in the data, we know government data can be a little wonky, and that might give the Fed a bit of wiggle room to hold off. But barring that, if the CPI and PPI data comes in as expected — or even slightly warmer, which is possible — I think we’ll see the market shift its perspective, and that will mean an even greater probability, captured in the CME FedWatch tool, that the Fed delivers a rate hike later this month. We’ll wait and see what happens and judge from there.

As you can see, my friends, we have a lot to chew through today, tomorrow, Thursday, and Friday. Please be sure to check your emails and alerts — we want to make sure you get all our latest thinking. And if we have to make any moves with the portfolio, we want you right there with us. Thanks for watching.

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At the time of publication, TheStreet Pro Portfolio was long AAPL shares.