The University of Michigan U.S. Index of Consumer Sentiment (ICS) is a monthly survey. The normalized ICS value is 100, assigned to the first quarter of 1966. Numbers at or above 100 signal an optimistic consumer and are an excellent sign for a consumer discretionary company. Conversely, the further below 100, the worse the economy.
The ICS value for March 2023 is 63.4, similar to some numbers recorded in the depths of the Great Recession in 2008. Considering that ICS numbers have steadily declined since the start of 2020, indicating that the economy has been worsening, it’s little wonder that even mighty Apple succumbed over the last year with decelerating revenue growth, shrinking margins, and decreased profits.
So why would anyone buy Apple? In a downturn where many companies’ revenue and profits are declining, the best businesses to invest in are ones that have a solid-enough balance sheet to survive and quickly rebound when the economy eventually turns upward…
Apple’s customers are often wealthier and more likely to spend higher amounts in the App Store than Alphabet’s Google Play customers. So developers often view Apple’s installed base of 2 billion active devices as more valuable than Google’s customers, making it easier for Apple to keep and attract even more app developers.
