After a nasty finish to last week, stocks are trying to bounce in the early going today. Gold and silver are mixed, while crude oil, the dollar, and Treasuries are flat.
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Apple Inc. (AAPL) announced plans to invest $500 billion and hire 20,000 workers in the US over the next four years, a move likely designed to appeal to the Trump Administration. The president recently met with AAPL CEO Tim Cook, and Apple’s step could be aimed at avoiding the extra 10% tariff Trump recently announced on Chinese imports. Apple’s iPhone and many other of its products are manufactured in that country.
AAPL, MSFT (YTD % Change)
Meanwhile, Microsoft Corp. (MSFT) is reportedly cutting back on some Artificial Intelligence-related spending. The software giant has canceled leases for data center capacity totaling a couple of hundred megawatts and also redirected some international spending dollars to the US. CEO Satya Nadella had previously pledged to spend $80 billion on AI and data centers in the current fiscal year, and the firm released a statement today reiterating that target.
Finally, a new analysis by Moody’s Analytics found that America’s economy is more dependent than ever before on spending by the wealthy. Spending among the top 10% of American earners now accounts for just under 50% of all spending, up from 36% three decades ago.
Appreciation in homes, stocks, and other assets has given the wealthiest Americans more confidence and money to spend. That has happened even as lower- and middle-income earners have been forced to cut back due to rising inflation and other forces.
