Apple bids adieu

14th June 2024 – 21st June 2024 | Another week in the markets

S&P 500	Nasdaq	VIX	DJIA	Russell 1000	NYSE
5,464.62	17,689.36	13.20	39,150.33	2,974.97	17,995.69
0.61%	0.00%	4.27%	1.45%	0.64%	1%
Nifty 50	Gold	Silver	Brent crude	USD-INR	EUR-INR
23,501.10	$2,334.70	$29.58	$84.18	83.57	89.38
0.15%	-1.61%	1.88%	1.83%	0.02%	-0.06%

Source: MarketWatch 

Hello Saturday,

This week, Apple pulls down the shutter on its Buy Now, Pay Later service, Eli Lilly goes on a legal offensive against sellers of fake weight loss drugs and one-third of the 30 fastest-growing spirit brands in the world are Indian.

• Barely a year after kickstarting its Apple Pay Later service, the iPhone and iPad manufacturer is putting an end to the BUy Now, Pay Later facility.
• Pharmaceutical major Eli Lilly is shooting more lawsuits at shady sellers of counterfeit weight-loss drugs like Mounjaro and Zepbound
• Indian alcohol companies are on the up and up as a third of the world’s 30 fastest-growing spirits brands have Indian roots
• Microsoft, Nvidia and Apple now command a market share larger than that of China’s combined stock market

Taking stock | Apple bids adieu! | Legal levers! | Spirits soar! | Microsoft+Apple+Nvidia > China’s market cap | Invest wisely | Another week in the markets

Taking stock

The S&P 500 ended the week with a rise of 0.6%, while the Nasdaq shed 0.2% on Friday. Dow Jones ended the week as an outperformer gaining 1.5%. The S&P 500 has climbed over 15% this year thanks to a torrent of funds looking to profit from the AI rally.

Apple bids adieu! 

Only a year after starting its Apple Pay later service, the technology major has decided to pull the shutters on its Buy Now, Pay Later facility.

The service allowed customers to break payments ranging from $50 to $1000 into four payments and spread them over six weeks, without charging any interest or fees.

The failure of the service marks the end of the company’s initiative to deepen relationships with customers using its deep cash reserves. Apple was competing with the likes of Affirm and Klarna in this space.

Apple’s website confirmed earlier this week that it will no longer be furnishing loans under this particular scheme while clarifying that existing loans under the service won’t be affected. The iPhone manufacturer said that it plans on offering new ways for customers to apply for Buy Now, Pay Later offers from other companies when they use Apple Pay. 

Apple’s move to close down the credit scheme is signalling a clear win for Affirm, which will be offering its services on Apple Pay. Citigroup and Synchrony Financial will also be providing a Buy Now, Pay Later facility via Apple Pay. Affirm’s stock price closed at $29.87 on Friday. The stock price has nearly doubled in the last 12 months.

Legal levers!

Pharmaceutical major Eli Lilly is going on the legal offensive. 

It is charging ahead full tilt in its legal campaign against sellers of counterfeit weight-loss drugs that market themselves as Mounjaro and Zepbound. Eli Lilly is filing lawsuits against med-spas, wellness centres and other firms that deliberately sell products that contain tirzepatide, which is the antidiabetic drug that Eli Lilly markets as Mounjaro and Zepbound.

The suits being filed by Eli Lilly follow a pattern adopted by the pharma major last fall. At that time, Eli Lilly had stuck a settlement deal with Totality Medispa. The medispa was accused of selling Mounjaro and Zepbound to its customers under the false impression of approval being granted by the US Food and Drug Administration.

The company also released an open letter making observations on “certain practices we are seeing from others related to our tirzepatide medicines—Mounjaro and Zepbound”

In the open letter, the company said that Mounjaro and Zepbound “are indicated for the treatment of serious diseases; they are not approved for – and should not be used for – cosmetic weight loss.” 

The company also mentioned that the two products are not approved for use in patients under 18 years.

“Social media posts, videos, and ads promoting use of Mounjaro and Zepbound in people under 18 are inappropriate and may expose people to significant risks because the safety and efficacy of Mounjaro and Zepbound have not been established in people under the age of 18,” the company said in its open letter.

Spirits soar!

A third of the 30 fastest-growing spirits brands in the world are Indian, as per a report by Drinks International.

The report also pointed out that six out of the top ten whisky brands globally are from India. 

The report indicated that Iconiq White Whisky by Allied Blenders and Distillers (ABD) sold 1.6 million cases in 2023, emerging as the fastest-growing whisky in the world. The whisky brand pulled off the feat, growing its sales by a whopping 1500%. 

Meanwhile, three other brandy brands that made it to the top ten list include Courier Napoleon and Mansion House by Tilaknagar Industries and Morpheus brandy by Radico Khaitan. 

United Spirits’ McDowells held on to its title of the world’s largest whisky brand. In 2023, it logged in sales of 31.4 million cases, although its sales grew by merely 1.9%. Other brands like Royal Stag, Imperial Blue, Blenders Pride and Officer’s Choice also found a place in the top-selling 30 brands globally.

Considering that 100 million people are expected to enter the legally permitted drinking age bracket in the next five years, liquor companies like Diageo and Pernod Ricard count India as their topmost priority market. 

The report also marked out that while the majority of the sales by the Indian brands are domestic, spirit producers like Radico Khaitan, Pernod Ricard and Diageo have all invested heavily in premium single malts with a focus on exports. The report expects a growth in global marketing and consumption of Indian whisky in overseas markets. This will, possibly, lead to the premiumisation of domestic whiskies and will result in an erosion of market shares of the dominant domestic brands.

Source: Google Finance 

Microsoft+Apple+Nvidia > China’s market cap

The market capitalisation of Microsoft, Nvidia and Apple is now worth more than the market cap of China’s stock market.

With a cumulative market cap of $9.2 trillion, the three tech majors now outsize the $9 trillion worth of stocks actively traded on Chinese bourses, excluding the exchanges in Hong Kong. 

Benefitting the most from the flood of new money streaming into the AI boom is Nvidia, whose market cap hit $3 trillion this week. It is the first computer chip firm in business history to reach such a unique milestone.

The Santa-Clara headquartered company commands an enviable 80% dominance in the AI chip manufacturing space, which helps it tower over other rival companies. These AI chips are highly sought after by other software companies given their enormous processing power. These chips power data centres running complex AI processes making them the next big focal point of technological evolution. Meanwhile, Microsoft has also been keeping pace in the AI boom race by investing in OpenAI and incorporating more and more AI features in its latest prodducts and offerings.

Apple, on the other hand, has turned out to be a bit of a laggard. The company has not delivered its strongest performance this year considering muted iPhone sales in China and a crippling $2 billion fine imposed by the European Union. However, investor sentiment is turning in favour of the company, and its stock price has delivered around 9% gains in the last 1 month.

Invest wisely 

A key element of investing is to keep redeeming a part of your portfolio, when the markets are operating at or close to peak optimism. Invariably, markets go through spells of volatility, and stock prices often deliver a pleasant surprise for the investor willing to wait for a discounted price. It is here that the Appreciate app can help you by providing financial metrics that show whether your investments are undervalued or overvalued. With our inexhaustible research database, conducting deep fundamental and technical research has never been this simple.

Warm regards,
Another week
in the markets