Over $200 billion in US stock market value was lost on Thursday, October 27th when Amazon and Apple released their quarterly results showing sales that did not meet investors’ expectations. This caused a 17% drop in Amazon stock prices and a 1% drop in Apple stock. The companies’ reports and comments from executives indicate that these sales results are being caused by general economic factors that are affecting the entire retail and technology industries, such as reduced household budgets, high inflation, and high energy costs. All the while, the largest monopolies in the US, such as Google, Microsoft, as well as Amazon, told investors that they will begin to slow down hiring or freeze hiring in less profitable departments. All this points to the continued deterioration of the global economy and the possibility of another great crisis of overproduction that will cause more widespread layoffs, austerity, and political reaction.
Amazon released a report that showed that, while retail sales grew as expected, their revenue from Amazon Web Services was impacted greatly by the decrease in eCommerce spending. Meanwhile, Apple’s report indicates that sales of the new iPhone 14 were lower than expected, possibly indicating that the same factors that affected Amazon sales have decreased demand for luxuries in the US, which is the world’s largest market for iPhones.
Meanwhile, the most recent data from the Bureau of Labor Statistics show that job openings fell 1.1 million in August, the largest one-month drop since the early months of the COVID-19 pandemic. This year has also seen substantial layoffs by companies such as Ford (3,000 workers), Peloton (2,800 workers), Microsoft (2,800 workers), Carvana (2,500 workers), and Shopify (1,000 workers). These usually followed lackluster earnings reports and represented a substantial proportion of the companies’ in-house staff. For instance, Peleton’s layoff constituted a 20% reduction in its staff.
All of this indicates that the economy is already showing signs of another crisis that is only just beginning. While Apple and Amazon stock fell, the Dow Jones surged in what could possibly be a record-setting month for its performance, indicating that the crisis has not come into full swing yet. However, it is inevitable that the layoffs, inflation, and stagnant wages will lead to another crisis of overproduction that will worsen the conditions of the working class. This can strengthen the forces of political reaction, but it can also strengthen the proletarian forces if the communists are disposed to explain that the causes of the crisis lay in the inherent laws of capitalist development and that the solution is for the working class to take power for itself and put an end to capitalism.
