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Today’s Menu

• Apple CEO signals urgent AI investment shift amid competitive pressure

• Crypto markets suffer broad selloff as tariff implementation triggers risk-off sentiment

Markets

TODAY IN AI

Apple CEO signals urgent AI investment shift amid competitive pressure

Apple CEO Tim Cook has acknowledged the company's lagging position in artificial intelligence, announcing increased openness to mergers and acquisitions that could accelerate the iPhone maker's AI development roadmap. With Apple's stock falling 15% this year while trailing six of the seven "Magnificent 7" companies, the pressure to catch up in AI has become impossible to ignore.

Cook's statement that Apple is "very open to M&A that accelerates our roadmap" represents a significant philosophical shift for a company that has historically relied on internal development rather than external acquisitions for core technologies. This change suggests Apple recognizes its AI deficit requires immediate external intervention rather than gradual internal progress.

Reports indicate Apple held internal discussions about acquiring AI startup Perplexity, demonstrating the company's willingness to consider significant AI investments beyond typical product integrations. Such acquisition talks signal Apple's recognition that its current AI capabilities lag substantially behind competitors.

The company's stock underperformance reflects investor concern about Apple's delayed AI adoption while competitors like Microsoft, Google, and Nvidia have captured substantial value from AI investments. This market pressure creates urgency for Apple to demonstrate meaningful AI progress rather than incremental improvements.

Apple's traditional approach of waiting for technologies to mature before integration has proven inadequate for AI, where first-mover advantages and rapid iteration cycles determine market position. The company's deliberate, privacy-focused development style conflicts with the aggressive deployment strategies that have defined AI leadership.

The M&A openness suggests Apple may abandon its typical "not invented here" culture for AI technologies, potentially acquiring multiple companies to rapidly build comprehensive AI capabilities across different domains and applications.

Cook's acknowledgment essentially admits that Apple's conservative AI strategy has failed to keep pace with industry development, forcing a more aggressive approach that contradicts the company's historical preferences for organic growth and internal innovation.

TODAY IN CRYPTO

Crypto markets suffer broad selloff as tariff implementation triggers risk-off sentiment

Bitcoin has declined 3% in the past 24 hours, falling below $115,000, while performing better than most major cryptocurrencies as broad market selling accelerates. The CoinDesk 20 index dropped 6%, with Ethereum declining 5.7% despite posting its strongest monthly gain in three years, and XRP losing over 7%.

The selloff coincides with implementation of President Trump's tariffs on key trading partners, including levies ranging from 10% to 41% on imports from Canada, the European Union, and Japan. Additional tariffs are scheduled to take effect on August 7, creating ongoing uncertainty about trade relationships and economic stability.

Asian equity markets experienced their worst week since April as tariff impacts became apparent, while the U.S. dollar rallied significantly, pushing the dollar index above 100 for the first time since May. This dollar strength typically creates headwinds for cryptocurrencies and other risk assets.

The tariffs have already influenced inflation expectations, with the Federal Reserve's preferred core PCE measure rising to 2.8% year-over-year in June. This increase has dampened hopes for September rate cuts, with Polymarket traders reducing rate cut probability from 56% to 38%, while the CME FedWatch tool shows similar 39% odds.

According to 21Shares strategist Matt Mena: "For crypto, looser financial conditions would be a major tailwind." The current trajectory toward potentially higher rates for longer periods creates challenging conditions for risk assets including cryptocurrencies.

Today's nonfarm payrolls data could prove decisive, with expectations for 110,000 jobs created last month. Stronger employment figures could further reduce rate cut expectations, while weaker data might revive hopes for monetary easing.

Options traders are already positioning for continued weakness, with Wintermute's Jake Ostrovskis noting: "We're seeing increased short-term bearish positioning on BTC with capped upside strategies. ETH options into late August are notably different, with positioning balanced to even outright bullish."

The divergence in options positioning suggests traders view Ethereum's prospects more favorably than Bitcoin's despite current selling pressure, potentially reflecting expectations for regulatory clarity benefits following the GENIUS Act passage.

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Until next time,

Damon James