What does this mean?
Amazon’s cloud business brought in 33% more revenue than the same time last year, while its ecommerce segment – boosted by more efficient deliveries and the success of its Prime memberships – ticked along nicely too. And with the company’s expectation-beating revenue looking all the more impressive next to its rivals’ bleak results, investors could breathe a sigh of relief: they initially sent its shares up 12%.
Not to be outdone, Apple posted higher-than-expected iPhone sales shortly afterward, while also noting that the number of active Apple devices is now at an all-time high. And since that’s given the company more opportunity to tempt users with the likes of Apple Music and Apple TV+, its highly profitable services segment continued to grow quickly last quarter. Investors were just glad to go out with a bang, sending the company’s shares up 4%.
Source: Google Finance
Why should I care?
The bigger picture: Amazon sends in the heavies.
Amazon isn’t resting on its laurels, announcing this week that it’ll be upping the price of Amazon Prime by an average of 31% across Europe. That’s a hike that won’t cost Amazon a penny to roll out, meaning it’s essentially free money if customers don’t abandon the service. Amazon, for its part, is confident that won’t happen, not least because it did the same thing in the US in February without much downside. Of course, inflation has only risen since then, and lighter wallets might lead to a different result this time around…
Zooming out: Apple tries to woo China.
Meanwhile, Apple is focusing on improving sales in a lockdown-bruised China, where it rolled out discounts on iPhones and related products this week. The tech giant is notoriously reluctant to slash prices on its products, but it seems it’s willing to make compromises until the world’s biggest smartphone market gets back up and running.
Keep reading for our next story...
The US Economy Entered A Technical Recession
Data out on Thursday showed that the US economy has now officially entered a technical recession.
What does this mean?
Sure, the US economy shrank in the first quarter of this year, but economists had been expecting it to start growing again last quarter – if only marginally. Those expectations have swiftly been dashed: the US economy shrank by an annualized 0.9% last quarter. There were drop-offs in all sorts of areas, from personal consumption – a key measure of consumer spending – to company inventories. Business investment, housing investment, and government spending slowed down too, highlighting the impact of rising inflation and interest rates on the economy. So after months of speculation, it’s happened: the US is in a technical recession.
Why should I care?
The bigger picture: A lesson in semantics.
The word “technical” is important here. A country is in a technical recession when its economy shrinks for two quarters in a row, but the US can – and does – choose to ignore that definition. Instead, it waits until the National Bureau of Economic Research has given its opinion, which the household name isn’t due to do for at least a few months. That’s led some economists to believe that the Federal Reserve will only rethink growth-damaging rate hikes if one of two things happen: the jobs market falters, or inflation reverses course.
Source: The New York Times
Zooming out: Europe’s next.
We’ll also find out how Europe’s economy is doing soon, but it’s not looking good: data out on Thursday showed that consumer confidence in the region dropped to its lowest on record this month. That probably has something to do with the spreading energy crisis, not to mention the European Central Bank’s decision to hike rates for the first time in a decade. Those factors certainly have Goldman Sachs feeling edgy: the investment bank said this week that it thinks the European economy will shrink 0.1% and 0.2% this quarter and next, plunging the region into its own technical recession.
.png)
Kommentare