BIG THINGS HAPPENING AT APPLE. “..seeks to emphasize its contributions to the American economy after years of taking criticism for outsourcing manufacturing to China.” – By Todd Horwitz, Bubba Trading


Todd’s Daily Video Commentary can be found here:


Taking One for the Team

Apple Inc. said it would pay a one-time tax of $38 billion on its overseas cash holdings and ramp up spending in the U.S., as it seeks to emphasize its contributions to the American economy after years of taking criticism for outsourcing manufacturing to China. The world’s most valuable publicly traded company laid out its plans Wednesday in a statement that was full of big-dollar figures, though it said that much of the money reflected Apple’s current pace of spending.

Apple said it would invest $30 billion in capital spending in the U.S. over five years that would create more than 20,000 jobs. The total includes a new campus, which initially will house technical support for customers, and $10 billion toward data centers across the country. It also will expand from $1 billion to $5 billion a fund it established last year for investing in advanced manufacturing in the U.S.


Apple is a success story that could only have happened in America, and we are proud to build on our long history of support for the U.S. economy,” said Tim Cook, Apple’s CEO. Cook had long said Apple would bring back some of those profits if the U.S. were to lower the corporate tax rate.

At the same time, the company is realizing a savings of $42 billion from the new tax bill, notes analyst and investor Gene Munster, from Loup Ventures, as it takes advantage of a one-year window that lowers the tax rate on repatriated profits to 15.5%. That’s less than the 21% tax rate on corporate profits from the new law, itself a drop from the 35% prior rate. In a news release, Apple didn’t mention moving production of iPhones to the U.S. They are currently designed at Apple’s headquarters in Cupertino, California, but built at the Foxconn plants in China.

With the new investments and its current pace of spending with U.S. suppliers and manufacturers, which it expects to total $55 billion this year, Apple said its contribution to the U.S. economy will be more than $350 billion over the next five years. Re-investing the savings buffers the company against the notion is Apple benefitting from the bill but keeping all the money, says Patrick Moorhead, an analyst with Moor Insights.

Keep those stops tight
Todd “Bubba” Horwitz


Financial & Political Commentary



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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.