🍎 Inside Apple's results

What’s going on here?

Apple, led by none other than – ahem – “Tim Apple”, announced a mostly sweet crop of quarterly earnings on Thursday.

What does this mean?

The last quarter of the year is usually Apple’s biggest: it includes the gift-giving season, making it well worth paying attention to. And that festive revenue hit a record high this time around, which was roughly in line with what analysts were expecting. The firm’s profit, though, was bigger and jollier than forecast. Still, holidays can be awkward too – and iPhone sales came in 3% below analyst predictions, while Chinese revenue fell 15% shy. Fact is, competition from the likes of Huawei has been hot on Apple’s heels – and actually took a bite out of its latest quarter.

For the current period, analysts have forecast 6% growth for revenue and 12% for profit. But that could prove tough to deliver, unless Apple can convince Chinese customers to flock back to its pricey phones. Making “Apple Intelligence” available in the People’s Republic could help…

Why should I care?

For markets: Apple wasn’t picked last for once.

Heading into this week, Apple’s stock was down 11% since the start of the year, on course for its worst month since December 2022. While investors have been left starry-eyed by some of Big Tech’s AI advancements, they’ve been relatively unimpressed by Apple’s – enough to leave it out of the most recent rally. That said, those lower expectations worked in Apple’s favor this week. Spooked by Chinese competitor DeepSeek, investors fled from their favorite AI plays – and with Apple seemingly less reliant on the super-smart tech, they flocked to its shares instead, sending them up 4% on Monday. But hey, maybe Apple’s just been busy with a different megatrend. It’s linking up with Elon Musk’s SpaceX to offer Starlink support on iPhones, forging an alternative to the company’s in-house satellite services.

What’s going on here?

The European Central Bank (ECB) cut eurozone interest rates from 3% to 2.75% on Thursday – its fifth shave since last June.

What does this mean?

Economists and investors alike had expected this cut. In fact, traders’ activity had baked in a 94% chance of one happening. And boy, was it needed: data out on Thursday showed that the eurozone economy didn’t grow at all last quarter, falling short of economists’ already modest prediction of a 0.1% uptick. Much of the blame lies with France and Germany – the bloc’s biggest economies, both of which shrank. But with any luck, lower rates should support the whole region. They make borrowing cheaper and should, therefore, encourage people, businesses, and governments to spend and invest, pushing more money into the economy. On the downside, though, the trim could prick up still stubbornly high inflation.

Why should I care?

For markets: A reason to be cheerful.

The key European stock market index, the Stoxx 600, initially reached a new peak on Thursday – fresh off three straight days of record-breaking highs. That stands to reason: lower interest rates make new bonds look less attractive while, at the same time, increasing potential returns from riskier stocks. Investors aren’t wild about all of the region’s assets, though. Falling interest rates have made the euro less appealing, so they sold off the currency in favor of others – like the British pound and US dollar.

The bigger picture: Control the controllables – and the uncontrollables, if you can.

Much of Europe’s fate will depend on decisions made outside its borders. See, the US has threatened to increase trade taxes – a.k.a. tariffs – on European products that are shipped to the States. And if everything from French brie to German cars becomes more expensive, American shoppers will likely buy less of the region’s wares. That could slow the economy down by more than lower rates can offset.