Wall Street Breakfast: Reality Check

All eyes are on technology earnings this afternoon as Amazon (AMZN), Apple (AAPL) and Meta (META) report the last slate of Big Tech results. Apple investors have an additional reason to be on the lookout, with the company's first major product release since the Apple Watch came to market in 2015. It's a big deal for a tech giant that's been pulling levers to boost its revenue growth, which has now declined for four straight quarters, though fiscal 2024 looks slightly better, with sales growth expected to rise 3.4% Y/Y. Era of spatial computing? Called the Vision Pro, Apple's mixed reality headset will launch in the U.S. tomorrow, just hours after shareholders see the company's latest financials (expect some conference call comments). The device starts at $3,499, meaning it could be a "very niche product for a while," and while skepticism exists in some circles, others are more optimistic. "Two years from now we see this being a $1,500 device that will resemble sunglasses," Wedbush Securities analyst Dan Ives told Seeking Alpha. "This is just the first version of a broader strategy." Popular features can make users feel like Tony Stark, with the ability to type without a keyboard, gesture in midair to control the interface, and the presence of apps that can float in their workspace. The Vision Pro also uses EyeSight technology that reveals a user's eyes and alerts others to know when a person is using apps or immersed in an experience, alleviating the feeling of isolation often associated with other headsets. An R1 chip is on board to help the device's M2 chip process input from 12 cameras, five sensors and six microphones, but similar to the Meta (META) Quest Pro, the Vision Pro only has about two hours of battery life before needing an outlet. Outlook: The global headset market is expected to hit roughly $12.5B this year before reaching $57.2B by 2029, according to Precedence Research. Assuming Apple had 50% of the market by 2029 (it has 53% of the U.S. smartphone market), that would be worth slightly more than $28B in annual revenue. The degree of success of Apple's new headset will also heavily depend on third-party developer support and the time needed to build apps and features. Is this the next iPhone moment for the company? See what WSB subscribers think about Apple's Vision Pro.

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Top News Reality check Getty Images All eyes are on technology earnings this afternoon as Amazon (AMZN), Apple (AAPL) and Meta (META) report the last slate of Big Tech results. Apple investors have an additional reason to be on the lookout, with the company's first major product release since the Apple Watch came to market in 2015. It's a big deal for a tech giant that's been pulling levers to boost its revenue growth, which has now declined for four straight quarters, though fiscal 2024 looks slightly better, with sales growth expected to rise 3.4% Y/Y. Era of spatial computing? Called the Vision Pro, Apple's mixed reality headset will launch in the U.S. tomorrow, just hours after shareholders see the company's latest financials (expect some conference call comments). The device starts at $3,499, meaning it could be a "very niche product for a while," and while skepticism exists in some circles, others are more optimistic. "Two years from now we see this being a $1,500 device that will resemble sunglasses," Wedbush Securities analyst Dan Ives told Seeking Alpha. "This is just the first version of a broader strategy." Popular features can make users feel like Tony Stark, with the ability to type without a keyboard, gesture in midair to control the interface, and the presence of apps that can float in their workspace. The Vision Pro also uses EyeSight technology that reveals a user's eyes and alerts others to know when a person is using apps or immersed in an experience, alleviating the feeling of isolation often associated with other headsets. An R1 chip is on board to help the device's M2 chip process input from 12 cameras, five sensors and six microphones, but similar to the Meta (META) Quest Pro, the Vision Pro only has about two hours of battery life before needing an outlet. Outlook: The global headset market is expected to hit roughly $12.5B this year before reaching $57.2B by 2029, according to Precedence Research. Assuming Apple had 50% of the market by 2029 (it has 53% of the U.S. smartphone market), that would be worth slightly more than $28B in annual revenue. The degree of success of Apple's new headset will also heavily depend on third-party developer support and the time needed to build apps and features. Is this the next iPhone moment for the company? See what WSB subscribers think about Apple's Vision Pro.       Economy March madness It's settled - there will likely be no interest rate cut next month, although Fed Chair Jerome Powell signaled it could happen at some point this year. "I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that," he said after the Fed maintained its policy rate at 5.25%-5.50% yet again. "We need to see more evidence that tells us we are on a sustainable path to 2% inflation." Such confirmation and other hawkish comments pushed stock markets and yields lower. "Powell is concerned that the timing of the cut has to be immaculate," noted Yimin Xu, on behalf of Investing Group Leader Cestrian Capital Research. "Cutting too soon risks a return of inflation, but cutting too late can trigger an economic downturn." (79 comments)       Media Disney vs. DeSantis Federal Judge Allen Winsor has dismissed Disney's (DIS) lawsuit against Florida Governor Ron DeSantis and other state officials, saying the company lacked legal standing to sue the defendants on a claim that they violated its free speech rights. The saga began with a controversy over the Parental Rights in Education Act, commonly referred to as the "Don't Say Gay" law, but quickly escalated to other areas. DeSantis' press secretary Jeremy Redfern hailed the ruling, saying "the days of Disney controlling its own government and being placed above the law are long gone." Disney, on the other hand, plans to press forward with its case, saying if the ruling was left unchallenged, it would "set a dangerous precedent." (8 comments)       Financials Regional scare New York Community Bancorp (NYCB) sank nearly 38% on Wednesday after the bank swung to a surprise Q4 loss as it prepared for stricter capital requirements due to the acquisition of Flagstar Bank in 2022 and Signature Bank in 2023. NYCB added to its reserves and cut its dividend as its assets crossed the $100B threshold, while commercial real estate concerns compounded the worries. Note that NYCB had an SA Quant Dividend Safety Grade of D+. The disappointing results reignited regional bank fears, with the SPDR S&P Regional Banking ETF (KRE) sliding 5.9%. Investing Group Leader Trapping Value believes it will take at least six quarters to rebuild confidence in NYCB. (224 comments)       Today's Markets In Asia, Japan -0.8%. Hong Kong +0.5%. China -0.6%. India -0.2%. In Europe, at midday, London +0.3%. Paris -0.8%. Frankfurt -0.1%. Futures at 7:00, Dow flat. S&P +0.3%. Nasdaq +0.5%. Crude +1% to $76.58. Gold -0.8% to $2,050.10. Bitcoin -1.2% to $42,048. Ten-year Treasury Yield -3 bps to 3.94%. Today's Economic Calendar 7:30 Challenger Job-Cut Report 8:30 Initial Jobless Claims 8:30 Productivity and Costs 9:45 PMI Manufacturing Index 10:00 ISM Manufacturing Index 10:00 Construction Spending 10:30 EIA Natural Gas Inventory 4:30 PM Fed Balance Sheet  Companies reporting earnings today » What else is happening... Another great call by SA Alpha Picks: Powell Industries (POWL) soars 45%.  Boeing (BA) suspends 2024 guidance amid safety issues with 737 MAX. Tesla hopes to stay under the radar by keeping CATL at arm's length. Lululemon (LULU) extends 2024 share price decline amid new data. Biogen (BIIB) scraps Aduhelm, will focus on other Alzheimer's drugs. Cigna (CI) to sell Medicare business to nonprofit health insurer for $3.3B. Semi watch: Qualcomm (QCOM) pops as Q1 earnings top expectations. 14.2M block of Albertsons (ACI) shares being shopped by JPMorgan. Paramount (PARA) gains on report of special independent committee. House passes bill to enhance child tax credit, revive business tax breaks. Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.
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