Apple Inc. AAPL shares are moving higher Wednesday. Here’s what you need to know.
What To Know: In significant economic development, the Federal Reserve instituted a 50 basis points cut, bringing the federal funds rate to 4.75%–5%. This unexpected move, marking the first rate reduction in more than four years, reflects the Fed’s greater confidence in managing inflation.
The Fed also revised its economic growth forecast for 2024 down to 2%. Inflation projections for the same year were also lowered, while unemployment rates were revised upward through 2026.
Future Rate Path: The updated Dot Plot suggests another 50 basis points in cuts in 2024 and an additional 100 basis points by the end of 2025, highlighting a more aggressive easing approach compared to previous projections. This outlook signals a significant shift from the Fed's earlier stance and impacts projections for economic metrics over the next few years.
What Else: The company formerly abandoned its electric vehicle (EV) project after significant investments. In contrast, its key supplier Hon Hai Precision Industry Co Ltd – ADR, also known as Foxconn, HNHPF is advancing in the EV market. Foxconn, collaborating with Sharp, recently unveiled the LDK+ electric vehicle prototype. Designed with a room-like interior, the LDK+ aims to serve as a personal space, highlighting the evolving role of vehicles in the autonomous driving era.
Foxconn demonstrated strategic acumen by focusing on modular EV platforms that allow for cost-efficient, unique model creation. The company has also approved a $246 million investment in Northern Vietnam for manufacturing EV parts, with operations expected to start in January 2025. This investment underscores Foxconn's commitment to enhancing its production capabilities and positioning itself as a notable player in the EV industry.
AAPL Price Action: Apple shares closed Wednesday up 1.80% at $220.69, according to Benzinga Pro.
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Photo: Courtesy Apple Inc.
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