Spray a 3-quart baking dish with cooking spray. Add the bread cubes and diced apples to the dish and toss to mix.
In a large mixing bowl, whisk together the milk, cream, eggs, brown sugar, vanilla, 1 teaspoon cinnamon, and the nutmeg. Pour the mixture over the bread and apples and gently press the bread cubes down into the liquid. Let sit for 15 – 30 minutes to let the liquid absorb into the bread.
Preheat the oven to 350ºF.
Bake for 1 hour or until the mixture is set and golden brown. Brush the top of the bread pudding with melted butter. Combine the 1 tablespoon sugar with remaining ½ teaspoon cinnamon and sprinkle over the top.