Top Stock Market Highlights of the Week: Apple, US Federal Reserve and DBS Group

Welcome to this week’s edition of top stock market highlights.

Apple (NASDAQ: AAPL)

Apple unveiled exciting updates during its recent Worldwide Developers Conference (WWDC) presentation earlier this week.

The iPhone maker is making a push into the artificial intelligence (AI) realm in a bid to catch up with rivals within the same space.

Branded as “Apple Intelligence”, AI will now be incorporated into the iPhone’s features, including a partnership with OpenAI’s ChatGPT.

This technology can help to summarise text, create original images, and retrieve data from any of the apps within the phone based on a query.

Apple’s digital assistant, Siri, will also receive a revamp and users can now type messages rather than just speaking to it.

Apple Intelligence features will begin rolling out later this year but users will need to have at least an iPhone 15 Pro or Pro Max to operate them.

This requirement could result in one of the largest replacement cycles for old iPhones that the company has witnessed.

In addition, the new iOS 18 and iPadOS will also have upgraded features that improve customisation, productivity, and communication.

Meanwhile, the company’s new Vision Pro headset, which allows users to experience spatial computing, saw its first major update with visionOS 2.

Some new features include the ability to turn normal photos into 3D spatial pictures and new hand gestures for opening the Home View and Control Centre.

Vision Pro also goes on sale internationally with preorders beginning in China, Hong Kong, Singapore and Japan on 13 June with sales to start on 28 June.

Sales will commence in countries such as Australia, Canada, France, Germany and the UK from 12 July.

Elsewhere, the Apple Watch will have additional health capabilities such as enhanced pregnancy tracking and an app that shows at-a-glance vital statistics.

Investors are feeling excited about these new announcements and pushed shares of the Cupertino-based company to a new all-time high close of US$213.07 on 12 June.

US Federal Reserve

Policymakers at the US Federal Reserve lowered their expectations for interest rate cuts this year.

The updated projections came after a two-day policy meeting where officials reviewed a slew of economic data.

Rates are expected to be cut just once this year, a sharp reduction from the three that were pencilled in previously, according to the median estimate.

Forecasts for inflation were also raised, even after the latest reading on consumer prices provided some cheer.

The Federal Open Market Committee decided to hold benchmark rates at a range of 5.25% to 5.5%, the highest in more than two decades.

Investors are still bracing for two possible rate cuts this year as the central bank left these decisions on the table.

The Bureau of Labor Statistics published encouraging inflation numbers that showed a further cooling in May, the second consecutive month inflation has declined.

However, there appears to be a split within the committee with members either voting for no rate cuts, one cut, or two cuts.

Officials are also raising their long-term inflation outlook to 2.8%, up from 2.6% during the March meeting.

Some officials have commented that higher borrowing costs may not necessarily lead to an economic slowdown unlike what is commonly assumed.

Hence, higher for longer interest rates may be necessary to eventually bring inflation down to the Federal Reserve’s goal of 2%.

DBS Group (SGX: D05)

DBS is aiming to increase its assets under management (AUM) for its wealthy clients by the end of 2026.

This goal was communicated by Shee Tse Koon, who is the group executive and group head of the bank’s consumer banking group and wealth management.

In 2023, DBS’s wealth AUM stood at S$365 billion, up 23% year on year.

He added that he expects the AUM inflows to pick up once interest rates start coming down as this event will draw more participants into the markets.

He sounded confident that the bank can achieve this objective barring any unexpected adverse events.

Aside from attracting top-tier high-net-worth clients for the private banking division, DBS is also planning to attract the less affluent segment.

This segment is defined as individuals with assets of at least S$1 million.

By 2026, the lender hopes to double the number of clients within this less affluent segment.

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Disclosure: Royston Yang owns shares of Apple and DBS Group.

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