Unprecedented Chinese protests remove bullish reopening narrative from markets
Stocks fell Monday as social unrest from China’s prolonged Covid restrictions weighed on markets.
Protests across China over the country’s strict zero-Covid policies shook up global markets over the last 24 hours with concerns authorities will take longer to reopen the world’s second-largest economy. Thousands took to the streets in the biggest challenge to the authority of the Chinese Communist Party in years.Censors have moved quickly to scrub photos and video footage of the protests. Of course the China reopening hope was part of the bullish end-of-year narrative for markets – that now appears to have turned into something more serious for markets to worry about.
Ironically US listed Chinese stocks all performed strongly overnight relative to indexes.
This week, investors will eye a raft of economic data that will offer further information on the state of the U.S. economy. Key releases include Thursday’s personal consumption expenditures report – a key inflation measure for the Federal Reserve – and November payrolls report, scheduled for Friday.
The Dow Jones Industrial Average lost 497 points, or 1.5 per cent. The S&P 500 and Nasdaq Composite shed 1.5 per cent and 1.6 per cent, respectively.
The developments reverberated across global markets, with West Texas Intermediate crude futures briefly dipping to their lowest price since last December.
Shares of companies with big production facilities in the country were under pressure. Apple dropped 2.8 per cent after Bloomberg reported that unrest at a factory in China could mean 6 million fewer iPhone Pro units for the year.
Apple’s iPhone supply chain could be hit hard as more than 20,000 employees have reportedly quit Foxconn’s main iPhone plant in China due to concerns about Covid and other workplace issues
Most sectors fell today amid fairly broad-based weakness. Defensives outperformed with the likes of Merck, Walmart, Johnson & Johnson,Target & Coca-Cola up on the day. Energy was weak across the board despite crude recovering from early lows.
No commodity has been impacting more heavily than the oil price over the last two years with the oil price moving from one extreme to another. And it appears that the commodity is ripe for more volatility as China COVID restrictions, the Ukraine war, Russian price cap & the fear of a recession all weigh heavily on its pricing.
And in the world of venture capital – Workforce analytics, productivity tracking, employee monitoring software: Whatever you want to call it, worker surveillance tech is trending way, way up.
Pre-pandemic, just three in 10 companies with 1,000+ workers used tech to measure employee productivity, but by the end of 2021, six in 10 would report doing so. That growth is reflected in funding, too. Despite overall VC funding being down In the first three quarters of 2022, the sector’s total VC investment has surpassed $394 million—62 per cent more than 2021’s full-year total, even though the year is not yet over. The sector’s growth in usage and funding comes alongside the rise of fully or semi-remote work, which could make employers more nervous about workforce productivity.
Currencies
One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 66.54 US cents (Mon: 67.23 US cents).
Commodities
Iron ore futures are pointing to a 3.2 per cent gain. Iron ore is 3.3 per cent per cent higher at US$99.65 tonne.
Gold lost 0.8 per cent. Silver fell 2.4 per cent. Copper shed 0.9 per cent and oil gained 0.8 per cent.
Futures
The SPI futures are pointing to a flat start, up 0.03 per cent.
Figures around the globe
Across the Atlantic, European markets closed lower. Paris fell 0.7 per cent, Frankfurt lost 1.1 per cent and London’s FTSE closed 0.2 per cent lower.
In Asian markets, Tokyo’s Nikkei fell 0.4 per cent, Hong Kong’s Hang Seng dropped 1.6 per cent and China’s Shanghai Composite closed 0.8 per cent lower.
Yesterday, the Australian sharemarket lost 0.4 per cent to close at 7229.
Ex-dividends
Beacon Minerals (ASX:BCN) is paying 0.1 cents fully franked
Gryphon Capital (ASX:GCI) is paying 1.2 cents unfranked
GrainCorp (ASX:GNC) is paying 30 cents fully franked
Infratil (ASX:IFT) is paying 6.1543 cents unfranked
Kkr Credit Income Fund (ASX:KKC) is paying 1.0938 cents unfranked
Liberty Financial Group(ASX:LFG) is paying 21 cents unfranked
My Food Bag Group (ASX:MFB) is paying 2.7543 cents unfranked
Oceania Healthcare (ASX:OCA) is paying 1.4938 cents unfranked
Perpetual Credit Income Trust (ASX:PCI) is paying 0.5165 cents unfranked
Red Hill Iron (ASX:RHI) is paying 20 cents fully franked
360 Capital Enhanced Income Fund (ASX:TCF) is paying 3 cents unfranked
Dividends payable
Sky Network Television (ASX:SKT)
Champion Iron (ASX:CIA)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
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Source: Finance News Network
