Intel Increases Capital Spend
Intel (INTC) announced good numbers today with earnings of $0.50 vs. $0.43 expected. Sales also beat estimates. But hidden in in their report was the most important note for those watching the economy.
Capital spending forecast was increased $400 million to $5.2 billion. This is one of the first steps to an economic recovery because capital spending will translate into jobs for those building equipment, jobs for those running equipment and jobs for those selling the additional product. It shows Intel has enough faith in the future to invest dollars now.
Keep watching manufacturing earnings for clues on the economy. If companies are increasing capital spending, R&D and hiring we are on our way. I’d like to call this recovery a reverse slippery slope. When the ball gets rolling and unemployment falls we’ll be shot off like a cannon by the capital waiting on the sidelines.
Disclosure: The Mayor has no position in INTC.