Wall Street begins to get back to normal… the first improvement in consumer sentiment in six months… what will the new Dot Plot bring on Wednesday?… is Apple dead money? VIEW IN BROWSER As I write Monday approaching lunch, the markets are shaking off last week’s “risk-off” flight to safety after conflict erupted between Israel and Iran. Though the violence continued through the weekend, stocks are climbing today with all three major indexes solidly in the green. In the oil sector, WTI Crude (the U.S. benchmark) remains in the low $70s but has eased nearly 4% after racing higher in recent days. Meanwhile, gold has also pulled back, but trades not far below its all-time high. While it’s anyone’s guess where the Israeli/Iranian conflict goes from here, hopes are building that we could be nearing the end of the conflict. Here’s The Wall Street Journal from this morning: Iran has been urgently signaling that it seeks an end to hostilities and resumption of talks over its nuclear programs, sending messages to Israel and the U.S. via Arab intermediaries, Middle Eastern and European officials said. We’d like to see the violence give way to diplomacy and a return to normalcy, for the region, and for the world. Whether such a de-escalation is in the cards remains to be seen, but the door to dialogue appears to be cracking open, which is a good sign. Where did the inflation go? Last Friday, the latest University of Michigan consumer sentiment survey showed across-the-board improvement. It was the first uptick in six months. Equally importantly, consumers’ expectations for near-term inflation fell substantially. Let’s go to CNBC: For the headline index of consumer sentiment, the gauge was at 60.5, well ahead of the Dow Jones estimate for 54 and a 15.9% increase from a month ago. The current conditions index jumped 8.1%, while the future expectations measure soared 21.9%… On inflation, the one-year outlook tumbled from levels not seen since 1981. The one-year estimate slid to 5.1%, a 1.5 percentage point drop, while the five-year view edged lower to 4.1%, a 0.1 percentage point decrease. And earlier last week, we received even cooler data on inflation expectations. The Federal Reserve of New York reported that the one-year expectation had dropped to 3.2% in May. That was a 0.4 percentage point drop from April. This easing of consumer inflation expectations is important given the enormous impact that expectations have on prices. If consumers become convinced that inflation will worsen, they’ll buy goods and services today at prices that they believe will be lower than prices tomorrow. Of course, it’s this very buying pressure that results in higher demand, fueling the price increases that consumers fear. It’s a self-reinforcing feedback loop. But, for the moment, this loop is going in the right direction. After the Federal Reserve’s June FOMC meeting on Wednesday, we’ll get an updated Dot Plot To make sure we’re all on the same page, the Dot Plot is a visual representation of where each FOMC member projects the fed funds target rate will be over the next few years. It also includes their expectations of inflation based on projections for the Personal Consumption Expenditures (PCE) price index – the Fed's preferred measure of inflation. Most Fed watchers expect the new Dot Plot to show two quarter-point interest rate cuts in 2025, with the first arriving in September. Meanwhile, traders are speculating that the Fed may nudge their year‑end fed funds rate forecasts slightly higher than the March median of ~3.9% out of continued caution over tariffs and government spending risks. As to inflation, core PCE estimates could edge up to about 3.0% from March’s forecast of about 2.8%. Given the subdued inflation readings in the last two months, we’ll be listening to hear how Fed Chaiman Jerome Powell views the potential for tariff-based inflation. And if the Fed is expecting upward price pressure, is it a one-time price bump or sustained inflation? Either way, Powell & Co. will need to be more transparent with their policy rationale. Legendary investor Louis Navellier made this point last week after both the Consumer Price Index and Producer Price Index came in soft. From Louis in Growth Investor: The mythical inflation bogeyman has not materialized, folks… The bottom line is the Fed is going to have to say something at its meeting [this] week. And while I don’t expect them to cut key interest rates, they’re going to have to give us some guidance. They keep imagining an inflation bogeyman that hasn’t materialized. All eyes on Wednesday. We’ll report back. Did you miss Apple’s next big move? Apple – formerly the poster child for cutting-edge tech – has slipped into the background of the great AI race. For many months now, investors have been waiting for Apple’s “big reveal,” where we’d be wowed by whatever secretive AI project they have developed, thrusting it back into the spotlight of tech preeminence. We’re still waiting. Last week, Apple held its Worldwide Developers Conference (WWDC 2025) and underwhelmed the market. But our tech expert Luke Lango has a different take – and if he’s right you might want to add Apple to your portfolio while this AI giant in disguise is still under the radar. (Disclaimer: I own Apple.) Here’s Luke: Most people walked away from WWDC 2025… unimpressed. The company’s big splash was something called Liquid Glass – a new design aesthetic that adds a glass-like shine effect throughout iOS. The crowd nodded, clapped politely, and moved on… Some even said the keynote “lacked vision.” But here’s the twist: We think that Liquid Glass is the vision. Apple may have just unveiled the beginning of the end of the smartphone era – and almost no one noticed… Luke believes that, with Liquid Glass, Apple is laying the groundwork for its next big thing: AI Glasses. The tech giant is preparing to move away from yesterday’s world of the iPhone, and toward tomorrow’s world of ambient, wearable technology. Back to Luke: Apple Glass v1.0 may look more like a beefed-up Ray-Ban Meta (META) than a Vision Pro. But the implications are still massive. More than just fashion accessories, these specs will be AI-infused, context-aware, always-on agents designed to overlay just the right sliver of data onto your real world – all while looking like regular glasses. Apple isn’t the only Mag 7 moving in this direction – are you in position to profit? Luke has highlighted how Meta is doubling down on its Ray-Ban smart glasses, now equipped with AI assistants and multimodal perception… Alphabet is rebooting its long-dead Glass project with Android XR partnerships and AI features… And both Amazon and Samsung are quietly building glasses and ambient agent systems too. Luke believes this supports one takeaway: AI glasses are the next high-tech form factor. Now, sure you can invest in these mega-cap AI leaders. But if you’re looking for 10X+ returns, you need to look smaller. Fortunately, we’re at Day One of this next evolution of technology, which has shades of being at Day One of the iPhone back in 2007. This has Luke urging readers to recognize the significance of the investment opportunity: The smartphone created trillion-dollar titans, turning companies like Apple and Google into global powerhouses by putting a computer in every pocket – and unlocking a new era of consumer tech dominance. The App Store made thousands of millionaires, spawning entire businesses and indie developers who built fortunes off simple, scalable apps distributed at an instant to billions… Now imagine the same with AI glasses. And ask yourself: who’s building the picks and shovels for this tech gold rush? We can ask this question more broadly too. Beyond AI glasses, which companies are powering its sister tech advancement – agentic AI? Luke has a few names for you: [We’re about to hit the moment when] the entire conversation shifts from “what can AI do?” to “what’s still left for humans?” But don’t panic; position. If you’re an investor, get into the rightAI stocks. Own: - The infrastructure – think NVDA, ANET, AMD
- The platform builders – MSFT, GOOGL, META, etc.
- The appliers – NET, SNOW, PLTR, UBER, IOT, and more.
(Disclosure: I own AMD, MSFT, and GOOGL.) If you want to learn more about Luke’s top pick in this broad “AI 2.0” space, click here for his latest research video. Returning to Apple, if you’re growing frustrated with its lack of a hit AI product, think twice about throwing in the towel. The next evolution of tech is beginning to take shape, and Apple isn’t likely to remain in the shadows for long. We’ll keep you updated on all these stories here in the Digest. Have a good evening, Jeff Remsburg | 
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