The daily business briefing: April 29, 2021
Apple shares surge as iPhone sales drive record quarterly revenue, Biden unveils family-spending plan to Congress, and more
Pandemic-fueled sales lift Apple quarterly revenue to record high
Apple on Wednesday reported that its first-quarter revenue surged to a record high thanks to strong sales of premium iPhones and other products. Demand for top-of-the-line new 5G iPhones helped more than double the company's profit, which reached $23.6 billion on $89.6 billion in revenue. The company said its earnings were $1.40 per share, exceeding analysts' expectations of 99 cents per share. Investors were looking for indications that the growth, fueled by pandemic-induced purchases from customers spending more time in isolation, would continue. Apple shares were up by nearly 3 percent in early trading. Fellow tech giant Facebook also reported earnings that beat expectations, sending its shares up by more than 7 percent early Thursday.
Biden unveils family-spending plan in 1st address to Congress
President Biden touted his administration's accomplishments in his first 100 days in office on Wednesday night, telling lawmakers that America is "on the move again" after braving "pandemic and pain," and "insurrection and autocracy." Biden used his first address to a joint session of Congress to unveil his $1.8 trillion American Families Plan, which calls for increasing spending to provide family leave, child care, health care, preschool, and college education for millions of people, and paying for it largely by increasing taxes on the wealthiest Americans. "We have to prove democracy works," Biden said. He pointed to his $1.9 trillion stimulus package and his proposed $2.3 trillion infrastructure plan as signs of progress since he took office in January, just weeks after an insurrectionist mob attacked the Capitol.
Fed holds interest rates near zero
The Federal Reserve on Wednesday held interest rates near zero and said it would continue buying bonds and mortgage-backed securities to help the ongoing economic recovery from the damage done by the coronavirus pandemic. The U.S. central bank said at the close of a two-day policy meeting that it is optimistic after signs of improvement in hard-hit industries. "Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened," the policy-setting Federal Open Market Committee said in an updated statement. But with eight million people out of work compared to pre-pandemic employment levels, the need for ongoing stimulus is still there, the Fed said. The next Fed policy meeting is scheduled for mid-June.
Stock futures rise after Apple, Facebook results beat expectations
U.S. stock index futures rose on Thursday after Apple and Facebook reported better-than-expected quarterly earnings. Futures tied to the Dow Jones Industrial Average were up by 0.4 percent several hours before the opening bell. S&P 500 and Nasdaq futures gained 0.7 percent and 0.9 percent, respectively. The Dow fell by 0.5 percent on Wednesday. The S&P 500 and the Nasdaq dropped by 0.1 percent and 0.3 percent, respectively. Investors on Thursday will have a lot to digest, including fresh data on economic growth and unemployment claims. It also is the busiest day of what has so far been a strong earnings season. Companies reporting quarterly results after the bell include Amazon, Twitter, and U.S. Steel.
Federal data expected to show economic growth rate rose in 1st quarter
The Commerce Department is expected to report Thursday that the U.S. economy grew at a seasonally adjusted annual pace of 6.5 percent in the first quarter of 2021, according to economists surveyed by The Wall Street Journal. The official figures on the nation's gross domestic product are scheduled to be released at 8:30 a.m. Output rose at a 4.3 percent rate in the final quarter of 2020, after surging at a 33.4 percent pace in the third quarter in a rebound from the plunge caused by the coronavirus pandemic. First-quarter acceleration will indicate how much businesses benefited from increasing COVID-19 vaccinations and the easing of restrictions that states and cities imposed to curb the spread of the virus. "The U.S. economy is clearly in the nascent period of the recovery and headed for a robust expansion," said Joseph Brusuelas, chief economist at consulting firm RSM.