Market Conditions-Apple Inc
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Fed Monetary Policy in 2021 (Board of Governors of the Federal Reserve System, 2021) | Effect on Apple, Inc. in 2021 (Apple Inc., 2021) | |
Interest rates | The Federal Reserve, through the monetary policy, kept the target limit for federal funds near zero. Notably, this aimed to exceed the inflation and employment rates of 2 over time. | The Company anticipated interest rate uncertainties and engaged in interest rate risk management. This is so because the interest rate fluctuations influence their interest income earned on cash, cash equivalents, and marketable securities. |
Labor force | The recovery in labor force participation was slow after the Covid-19 pandemic. Job gains averaged 540,000 per month, and the unemployment rate decreased from 6.7% in December to 5.9% in June. However, the factors leading to uneven recovery in labor force participation diminish labor participation. | The Company had its workforce operate remotely during the Covid-19 pandemic. The reduced labor participation and slow recovery rate disrupted global suppliers and logistical networks, leading to supply shortages and decreasing sales for the Company. |
Inflation | Consumer price inflation increased from 1.2% to 3.9% in May 2021. When the price of food and energy items is removed from the index, the rate moves from 1.4% to 3.4%, a difference of 2%. | Apple Inc. was affected by the rise in the inflation rate. The Company had its products increase slightly in the period when the inflation rate increased. |
Supply chain bottlenecks | Supply chain bottlenecks resulted in upward pressure on inflation. Additionally, the bottlenecks reduced the ability of U.S. manufacturers to acquire inputs needed for the production processes. | The Company faced pressure on its production sites. In the fourth quarter of 2021, certain CCompany’scomponent suppliers faced disruptions, leading to supply shortages and affecting their sales. |
International development | Restrictions targeted at restraining the COVID-19 pandemic by various nations affected the nature of business. In 2021, financial conditions improved in international markets as governments worked hard to bring their economies back to work as before the pandemic. | Developments in the international market increased disruption in global financial markets and caused significant volatility (Barman et al., 2021). The price of the CCompany’sstock fluctuated in response to the restrictions. |
References
Apple, Inc. (2021). Annual Report. https://www.sec.gov/Archives/edgar/data/320193/000032019321000105/aapl-20210925.htm
Barman, A., Das, R., & De, P. K. (2021). Impact of COVID-19 in the food supply chain: Disruptions and recovery strategy. Current Research in Behavioral Sciences, 2, 100017.
Board of Governors of the Federal Reserve System. (2021). Monetary Policy Report – July 2021. https://www.federalreserve.gov/monetarypolicy/2021-07-mpr-summary.htm
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Question
Continue your work with the company selected in Week 1 (Apple, Inc.).
In preparation for the Week 4 Summative Assessment, research your company’s financial report from the past fiscal year, along with the market conditions from that same year. Links to each are as follows:
https://www.sec.gov/Archives/edgar/data/320193/000032019321000105/aapl-20210925.htm
https://www.federalreserve.gov/monetarypolicy/2021-07-mpr-summary.htm
Apple 2021 Annual Report and Monetary Policy Report 2021
Use the template above and compare your company’s recent annual report with the market conditions (Fed Monetary Policy) from that year. Focus on interest rates, labor force, inflations, supply chain bottlenecks, and international developments.
Tips and Hints: ????
Use the template above. Use the links above.
The annual report will be pulled up as a PDF. Go to the Table of Contents and click on Item 7. This is the section you want to review.
The Fed Monetary Policy for 2021 will pull up as a webpage. Review the items in bold from the template.