Apple Just Told Suppliers To Boost Production Of Its Latest iPhones By 10%

Plus, the jobs report was mixed, new developments in the impeachment inquiry, and HP Inc is restructuring.

Stocks opened higher this morning, with the Dow and S&P 500 up 0.3% at the open. The Nasdaq gained nearly 0.5%.

Stocks traded higher Friday morning following the release of the latest jobs report. U.S. hiring missed projections, adding just 136,000 jobs in September compared to the 145,000 expected, and wage gains cooled with hourly earnings rising 2.9%, the weakest gain in more than a year. One bright spot in the jobs report was the unexpected drop in the unemployment rate to 3.5%, the lowest level in 50 years. “Overall, it is a bit of a mixed bag,” said Deutsche Bank Securities chief economist Torsten Slok. However, the headline payrolls number alongside weakness in the manufacturing sector adds to signs that the trade war has put “downward pressure both on hiring and the economy.”

In other data out his morning, the U.S. trade deficit widened more than expected in August thanks in part to record imports of consumer goods as well as a fresh set of tariffs looming over China and Europe. The imbalance came in at $54.9 billion, above the $54.5 billion projected by economists and up from $54 billion in July. Even as the overall deficit rose, the gap with China fell 3.1% for August. On a year-over-year basis, the shortfall with China narrowed 11.4% from the same period in 2018. 

The impeachment inquiry continues to move at a breakneck pace. Text messages handed over to Congress show that U.S. ambassadors worked to persuade Ukraine to publicly commit to investigating President Trump’s political opponents, and explicitly linked the inquiry to whether or not Ukraine’s president would be granted an official White House visit. The messages released yesterday afternoon show that two ambassadors, both Trump appointees, coordinated with Trump’s personal lawyer, Rudy Giuliani, and a top aide for Ukraine president Volodymyr Zelenskiy. Beyond Ukraine, Trump said yesterday that “China should start an investigation” into Joe Biden and his son, Hunter. The statement prompted more concerns that the president is abusing his power to try to influence the 2020 election by pushing foreign rivals to probe his top political rivals.

Apple shares are up more than 2% this morning after the Nikkei Asian Review reported that the company told suppliers to boost production of the iPhone 11 range by as much as 10% in order to meet stronger-than-expected demand. Such an increase would add 7 to 8 million units to Apple’s initial plans. However, while suppliers said demand for the new iPhones is strong “for now,” they warned that the surge might not last. Deutsche Bank analysts said this morning that while they can’t confirm the Nikkei report, they do continue to see upside to current iPhone unit sales and believe there’s a good chance Apple could report year-over-year growth in iPhone revenues “if the report proves to be true.”

HP Inc announced a broad corporate restructuring plan late Thursday. The company plans to cut its workforce by as much as 16%, eliminating 7,000 to 9,000 positions through firings and voluntary retirements in an effort to help the company save around $1 billion by the end of fiscal 2022. HPQ is also expanding its stock repurchasing plan by $5 billion, and increase its dividend by 10%. “We are taking bold and decisive actions as we embark on our next chapter,”  CEO Enrique Lores told Barron’s in a recent interview. “We see significant opportunities to create shareholder value and we will accomplish this by advancing our leadership, disrupting industries and aggressively transforming he way we work. We will become an even more customer-focused and digitally enabled company that will lead with innovation and execute with purpose.” HPQ shares are down nearly -10% Friday morning following the restructuring announcement.

Stocks We’re Watching

Tyler Technologies (NYSE: TYL): Shares of Tyler Technologies briefly hit a record high yesterday. Earlier this week, the company announced that it has launched its Socrata-based cloud application, Law Enforcement Analytics, a new data-rich product for public safety command staff. “The access to and use of data is becoming even more important to our product offerings, and Tyler’s Law Enforcement Analytics solution is the latest example of that,” Tyler Public Safety Division president Bryan Proctor said in a press release. “As a cloud-based application, the solution is easy and cost effective to implement, and it allows agencies to start using data and insights immediately to help them deploy various tactics to help keep their communities safer. We’re confident that this tool will bring immediate value to agencies by giving them an inside look into crime patterns and scenarios.”

Algonquin Power & Utility (NYSE: AQN): Shares of this utility are up nearly 37% so far this year, and one analyst recently said its the safest utility stock on the market. Cypress Capital Management analyst Rob McConnachie says “Algonquin is a core holding of ours and it’s probably the largest of the utility holdings within our pool. It’s considered in the analyst community as the safest utility. We think that there are others that might have more upside potential but they’re not as safe. It’s a great core holding for the long term for clients.”