Tag Archives: Factory

Business

China’s Zhengzhou, home to world’s largest iPhone factory, ends Covid lockdown

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Hong Kong
CNN Business
 — 

The central Chinese city of Zhengzhou, home to the world’s largest iPhone factory, has lifted a five-day Covid lockdown, in a move that analysts have called a much-needed relief for Apple and its main supplier Foxconn.

Zhengzhou is the site of “iPhone City,” a sprawling manufacturing campus owned by Taiwanese contract manufacturer Foxconn that normally houses about 200,000 workers churning out products for Apple

(AAPL), including the iPhone 14 Pro and 14 Pro Max. Last Friday, the city locked down its urban districts for five days as Covid-19 cases surged there.

Foxconn’s massive facility is not part of the city’s urban districts. However, analysts say the lockdown would have been detrimental to efforts to restore lost production at the campus, the site of a violent workers’ revolt last week.

“This is some good news in a dark storm for Cupertino,” Daniel Ives, managing director of equity research at Wedbush Securities, told CNN Business, referring to the California city where Apple is based. “There is a lot of heavy lifting ahead for Apple to ramp back up the factories.”

Ives estimates the ongoing supply disruptions at Foxconn’s Zhengzhou campus were costing Apple roughly $1 billion a week in lost iPhone sales. The troubles started in October when workers left the campus in Zhengzhou, the capital of the central province of Henan, due to Covid-related fears. Short on staff, bonuses were offered to workers to return.

But protests broke out last week when the newly hired staff said management had reneged on their promises. The workers, who clashed with security officers, were eventually offered cash to quit and leave.

Analysts said Foxconn’s production woes will speed up the pace of supply chain diversification away from China to countries like India.

Ming-Chi Kuo, an analyst at TF International Securities, wrote on social media that he estimated iPhone shipments could be 20% lower than expected in the current October-to-December quarter. The average capacity utilization rate of the Zhengzhou plant was only about 20% in November, he said, and was expected to improve to 30% to 40% in December.

Total iPhone 14 Pro and 14 Pro Max shipments in the current quarter would be 15 million to 20 million units less than previously anticipated, according to Kuo. Due to the high price of the iPhone 14 Pro series, Apple’s overall iPhone revenue in the current holiday quarter could be 20% to 30% lower than investors’ expectations, he added.

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Business

China’s factory activity at lowest reading since April; Asia markets largely higher

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China’s factory activity misses expectations, contracts for a second straight month

China’s official manufacturing Purchasing Managers’ Index for November came in at 48, below the 50-point mark that separates growth from contraction.

That’s lower than the expectations of analysts polled by Reuters, who predicted a reading of 49. October’s PMI was 49.2.

PMI readings are sequential and represent month-on-month changes in factory activity.

— Abigail Ng

Australia’s monthly inflation indicator shows slight slowing

Australia’s consumer price index for October slowed to 6.9% on an annualized basis, from 7.3% in September, according to a monthly indicator by the Australian Bureau of Statistics.

The rise in prices for housing, food and non-alcoholic beverages, as well as transport led the overall CPI indicator higher.

Bilibili shares pop in Asia morning session

Hong Kong-listed shares of Bilibili popped as much as 12.7% in Asia’s morning after the company beat revenue estimates for the third quarter of the year.

Net revenue came in at 5.79 billion Chinese yuan ($809.8 million), 11% higher than the same period in 2021. Estimates from Refinitiv Eikon predicted revenue of 5.52 billion yuan.

Net losses narrowed to 1.7 billion yuan, and average monthly active users grew 25% on an annualized basis.

U.S.-listed shares of the company soared 22% overnight, while the Hong Kong shares were last up 8.47%.

— Abigail Ng

South Korea, Japan industrial production data comes in worse than expected

South Korea and Japan’s industrial production each saw declines for the month of October.

Japan’s preliminary industrial production for October declined 2.6% compared to a month ago, more than expectations of a decline of 1.5%, according to a Reuters poll.

The reading marks the second consecutive decline after seeing a fall of 1.7% the previous month.

South Korea’s industrial production also fell by 3.5% compared with a month ago, also lower than expectations of a decline of 1%. The reading marked the lowest since May 2020, when output declined 6.7%.

– Jihye Lee

China’s factory activity expected to contract for a second straight month

China’s official manufacturing Purchasing Managers’ Index for November is expected to come in at 49, below the 50-point mark that separates growth from contraction, according to analysts polled by Reuters.

That’s slightly lower than the reading of 49.2 reported in October.

PMI readings are sequential and represent month-on-month changes in activity.

— Abigail Ng

China says it is ‘closely watching’ virus developments when asked about shift in policy

Chinese health authorities said that officials are “closely watching” the developments of Covid when asked if protests in the region would lead to shifts in its zero-Covid policy.

“China has been following and closely watching the virus as it evolves and mutates,” officials said, according to a translation of Tuesday’s briefing.

– Christine Wang, Evelyn Cheng

CNBC Pro: Goldman Sachs’ Currie says oil stocks are trading ‘far below’ their long-term trend

Goldman Sachs’ Global Head of Commodities Research Jeff Currie told CNBC that historically, oil stocks have traded at a much higher premium to crude oil prices compared to current price levels.

For instance, the price gap between SPDR Oil & Gas ETF and ICE Brent Crude futures contract was about $66.60 on Tuesday. That’s significantly lower than the $104 gap recorded at the start of January 2017, according to Koyfin data, as the chart below shows.

China announces measures to boost elderly vaccination

China’s health authorities released a plan to boost elderly vaccination, according to a notice on the National Health Commission’s website.

Hong Kong-listed shares of CanSino Biologics extended gains in the afternoon session and rose as much as 18% shortly after the announcement was posted.

The notice said authorities should use multiple data points to accurately identify target groups for vaccination for the elderly.

CNBC Pro: As Wall Street gets bearish, these stocks with margin growth could be safe bets

Wall Street pros are worried about the outlook for stocks, and are urging investors to stay defensive. These stocks with margin growth could be safe bets.

Pro subscribers can read more here.

— Zavier Ong

Nasdaq and S&P 500 post third day down

The Dow Jones Industrial Average closed 3.07 points, or 0.01%, higher after trading down for much of the day. The index ended the day at 33,852.53.

Meanwhile, the Nasdaq Composite finished lower by 0.59%, to close at 10,983.78. The S&P 500 slipped by 0.16% to close at 3,957.63.

— Alex Harring

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Business

Elon GOAT Token brings giant Musk statue to Tesla factory in Austin

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People recently driving around in Austin might have seen Elon Musk.

But not the real person. Instead, they may have seen a sculpture of Musk’s head atop the body of a goat riding a rocket, all attached to a trailer.

Complete with what appear to be flames that shoot from the rocket, the statue was commissioned by the cryptocurrency company Elon GOAT Token. The company was delivering it to Tesla’s Gigafactory in Austin on Saturday, during what it dubbed “Goatsgiving.” The Elon GOAT Token ($EGT) sculpture was created to honor Musk’s “many accomplishments and commitment to Cryptocurrency,” the company said on its website. Musk is the owner of electric car manufacturer Tesla.

Over the past year, $EGT hasn’t seen much growth, according to data from tracker CoinMarketCap, but its founders hoped the Musk statue would inspire the entrepreneur to tweet about the company and bring new exposure to the token.

Elon GOAT Token’s efforts to deliver the statue landed the company on Twitter’s U.S. trending page. Musk purchased the social network last month, causing an upheaval with mass layoffs, departed advertisers and potential changes to the process of obtaining a Twitter Blue check mark.

Costing a total of $600,000, according to Elon GOAT Token, the Musk sculpture is a nod to the billionaire’s fame — a rocket representing SpaceX, the spacecraft company Musk founded; and the literal goat, a word that is also used as an acronym for the phrase “Greatest Of All Time.”

Despite exponential growth in recent years, cryptocurrency has had a rough 2022. FTX, the cryptocurrency exchange that was estimated to be worth $32 billion in January, collapsed this month. Its CEO resigned, and the company filed for bankruptcy, prompting an investigation into how the business came undone.

In the past year, millions of dollars in cryptocurrency have been stolen in scams targeting users of exchange operator Coinbase.

Why the FTX collapse has plunged the crypto world into upheaval

Although for Elon GOAT Token “times have not been good,” co-founder Ashley Sansalone said Saturday in a Twitter audio stream, the company had earmarked enough money to complete the statue project.

“We believe that Elon’s potential acceptance of this biblical sized gift could catapult $EGT into the limelight and accelerate its various initiatives,” the company said on its website.

Elon GOAT Token did not respond to The Washington Post’s request for comment Saturday.

After months of construction and travel across the country, the statue arrived at the Austin building, Elon GOAT Token confirmed in a tweet Saturday after live-streaming the event. Musk, who has 119 million followers on Twitter, had not publicly acknowledged the project as of Saturday evening. Tesla did not respond to The Post’s request for comment Saturday.

Kevin Stone, a sculptor based in Canada, said he received a call about the project last year from its designer, Danny Wang, who didn’t disclose the identity of whoever had commissioned the statue until after the contract was signed.

Crypto scam victims seek to hold Coinbase responsible for losses

At first, Stone thought the mystery client was Musk himself. He didn’t think anyone else would have commissioned such a “crazy project.”

The sculptor began work on the head of the piece in January and finished it nearly six months later, after about 600 hours of work. The sculpture of Musk’s head itself ended up six feet tall and four feet wide, weighing 250 pounds.

For Stone, who is known for his sculptures of birds and dragons, the project was the chance to do something he’d never done.

“It was so crazy I couldn’t turn it down,” he said. “I just wanted to be a part of it just because it was such a unique opportunity to do something that was really, really different.”

Spectacle, a U.S. design and fabrication company, designed the goat and rockets on the statue.

On Saturday evening, Sansalone started a Twitter audio stream, saying he and those who had accompanied him for the journey were sitting about 150 feet away from the Gigafactory, where security had asked them to relocate for safety reasons.

Sansalone said that the Elon GOAT Token statue was always “supposed to be fun,” intended to make Musk laugh, and that the crypto company was trying to do the same thing as the Tesla CEO, despite being “small in comparison.”

As the sun began to set in Austin on Saturday, it was unclear whether Musk would allow the statue to stay.

“We’re not leaving,” Sansalone said near the end of the stream. “We’re going to see how this goes. We’re going to wait here.”

In the background of the Twitter audio stream, people could be heard yelling: “Elon Musk, let’s go! Elon Musk, let’s go!”



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Business

Apple has a huge problem with its supplier’s iPhone factory in China

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Hong Kong
CNN Business
 — 

A violent workers’ revolt at the world’s largest iPhone factory this week in central China is further scrambling Apple’s strained supply and highlighting how the country’s stringent zero-Covid policy is hurting global technology firms.

The troubles started last month when workers left the factory campus in Zhengzhou, the capital of the central province of Henan, due to Covid fears. Short on staff, bonuses were offered to workers to return.

But protests broke out this week when the newly hired staff said management had reneged on their promises. The workers, who clashed with security officers wearing hazmat suits, were eventually offered cash to quit and leave.

Analysts said the woes facing Taiwan contract manufacturing firm Foxconn, a top Apple supplier which owns the facility, will also speed up the pace of diversification away from China to countries like India.

Daniel Ives, managing director of equity research at Wedbush Securities, told CNN Business that the ongoing production shutdown in Foxconn’s sprawling campus in the central Chinese city of Zhengzhou was an “albatross” for Apple.

“Every week of this shutdown and unrest we estimate is costing Apple roughly $1 billion a week in lost iPhone sales. Now roughly 5% of iPhone 14 sales are likely off the table due to these brutal shutdowns in China,” he said.

Demand for iPhone 14 units during the Black Friday holiday weekend was much higher than supply and could cause major shortages leading into Christmas, Ives said, adding that the disruptions at Foxconn, which started in October, have been a major “gut punch” to Apple this quarter.

In a note Friday, Ives said Black Friday store checks show major iPhone shortages across the board.

“Based on our analysis, we believe iPhone 14 Pro shortages have gotten much worse over the last week with very low inventories,” he wrote. “We believe many Apple Stores now have iPhone 14 Pro shortages … of up to 25%-30% below normal heading into a typical December.”

Ming-Chi Kuo, an analyst at TF International Securities, wrote on Twitter that more than 10% of global iPhone production capacity was affected by the situation at the Zhengzhou campus.

Earlier this month, Apple said shipments of its latest lineup of iPhones would be “temporarily impacted” by Covid restrictions in China. It said its assembly facility in Zhengzhou, which normally houses some 200,000 workers, was “currently operating at significantly reduced capacity,” due to Covid curbs.

The Zhengzhou campus has been grappling with a Covid outbreak since mid-October that caused panic among its workers. Videos of people leaving Zhengzhou on foot went viral on Chinese social media in early November, forcing Foxconn to step up measures to get its staff back.

To entice workers, the company said it had quadrupled daily bonuses for workers at the plant this month. A week ago, state media reported that 100,000 people had been successfully recruited to fill the vacant positions.

But on Tuesday night, hundreds of workers, mostly new hires, began to protest against the terms of the payment packages offered to them and also about their living conditions. Scenes turned increasingly violent into the next day as workers clashed with a large number of security forces.

By Wednesday evening, the crowds had quieted, with protesters returning to their dormitories on the Foxconn campus after the company offered to pay the newly recruited workers 10,000 yuan ($1,400), or roughly two months of wages, to quit and leave the site altogether.

In a statement sent to CNN Business on Thursday after the protests had wound down, Apple said it had a team on the ground at the Zhengzhou facility working closely with Foxconn to ensure employees’ concerns were addressed.

Even before this week’s demonstrations, Apple had started making the iPhone 14 in India, as it sought to diversify its supply chain away from China.

The announcement in late September marked a major change in its strategy and came at a time when US tech companies were looking for alternatives to China, the world’s factory for decades.

The Wall Street Journal reported earlier this year that the company was looking to boost production in countries such as Vietnam and India, citing China’s strict Covid policy as one of the reasons.

Kuo said on Twitter that he believed Foxconn would speed up the expansion of iPhone production capacity in India as a result of Zhengzhou lockdowns and resulting protests.

The production of iPhones by Foxconn in India will grow by at least 150% in 2023 compared to 2022, he predicted, and the longer term goal would be to ship between 40% and 45% of such phones from India, compared to less than 4% now.

— Chris Isidore contributed to this report.



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Business

Foxconn protests: iPhone factory offers to pay its workers to quit and leave Zhengzhou campus

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Hong Kong
CNN Business
 — 

Foxconn has offered to pay newly recruited workers 10,000 yuan ($1,400) to quit and leave the world’s largest iPhone assembly factory, in an attempt to quell protests that saw hundreds clash with security forces at the compound in central China.

The Apple supplier made the offer Wednesday following dramatic scenes of violent protests on its campus in Zhengzhou, the capital of Henan province, in a text message sent from its human resources department to workers.

In the message, seen by CNN, the company urged workers to “please return to your dormitories” on the campus. It also promised to pay them 8.000 yuan if they agreed to quit Foxconn, and another 2,000 yuan after they board buses to leave the sprawling site altogether.

The protest erupted on Tuesday night over the terms of the new hires’ payment packages and Covid-related concerns about their living conditions. Scenes turned increasingly violent on Wednesday as workers clashed with a large number of security forces, including SWAT team officers.

Videos circulating on social media showed groups of law enforcement officers clad in hazmat suits kicking and hitting protesters with batons and metal rods. Some workers were seen tearing down fences, throwing bottles and barriers at officers and smashing and overturning police vehicles.

The protest largely tailed off around 10 p.m. on Wednesday as workers returned to their dormitories, having received Foxconn’s payment offer and fearing a harsher crackdown by authorities, a witness told CNN.

The Zhengzhou plant was hit by a Covid outbreak in October, which forced it to lock down and led to a mass exodus of workers fleeing the outbreak. Foxconn later launched a massive recruitment drive, in which more than 100,000 people signed up to fill the advertised positions, Chinese state media reported.

According to a document setting out the salary package of new hires seen by CNN, the workers were promised a 3,000 yuan bonus after 30 days on the job, with another 3,000 yuan to be paid after a total of 60 days.

However, according to a worker, after arriving at the plant, the new recruits were told by Foxconn that they would only receive the first bonus on March 15, and the second installment in May – meaning they must work through the Lunar New Year holiday, which starts in January 2023, to get the first of the bonus payments.

“The new recruits had to work more days to get the bonus they were promised, so they felt cheated,” the worker told CNN.

In a statement Thursday, Foxconn said it fully understood the new recruits’ concerns about “possible changes in the subsidy policy,” which it blamed on “a technical error (that) occurred during the onboarding process.”

“We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed,” it said.

Foxconn was communicating with employees and assuring them that salaries and bonuses would be paid “in accordance with company policies,” it said.

Apple, for which Foxconn manufactures a range of products, told CNN Business that its employees were on the ground at the Zhengzhou facility.

“We are reviewing the situation and working closely with Foxconn to ensure their employees’ concerns are addressed,” it said in a statement.

On Thursday morning, some workers who had agreed to leave had received the first part of the payment, a worker said in a livestream, which showed workers lining up outdoors to take Covid tests while they waited for departing buses. Later in the day, livestreams showed long lines of workers boarding buses.

But for some, the trouble is far from over. After being driven to the Zhengzhou train station, many couldn’t get a ticket home, another worker said in a livestream on Thursday afternoon. Like him, thousands of workers were stuck at the station, he said, as he turned his camera to show the large crowds.

Zhengzhou is set to impose a five-day lockdown in its urban districts, which include the train station, starting from midnight Friday, authorities had announced earlier.

The protest started outside the workers’ dormitories on the sprawling Foxconn campus on Tuesday night, with hundreds marching and chanting slogans including “Down with Foxconn,” according to social media videos and a witness account. Videos showed workers clashing with security guards and fighting back tear gas fired by police.

The stand-off lasted into Wednesday morning. The situation quickly escalated when a large number of security forces, most covered in white hazmat suits and some holding shields and batons, were deployed to the scene. Videos showed columns of police vehicles, some marked with “SWAT,” arriving on the campus, normally home to some 200,000 workers.

More workers joined the protest after seeing livestreams on video platforms Kuaishou and Douyin, the Chinese version of TikTok, the worker told CNN. Many livestreams were cut or censored. Online searches for “Foxconn” in Chinese have been restricted.

Some protesters marched to the main gate of the production facility compound, which is located in a separate area from the workers’ dorms, in an attempt to block assembly work, the worker said.

Other protesters took the further step of breaking into the production compound. They smashed Covid testing booths, glass doors and advertising boards at restaurants in the production area, according to the worker.

Having worked at the Zhengzhou plant for six years, he said he was now deeply disappointed by Foxconn and planned to quit. With a baseline monthly salary of 2,300 yuan, he has been earning between 4,000 yuan to 5,000 yuan per month, including overtime pay, working 10 hours a day and seven days a week during the pandemic.

“Foxconn is a Taiwanese company,” he said. “Not only did it not spread Taiwan’s values of democracy and freedom to the mainland, it was assimilated by the Chinese Communist Party and became so cruel and inhumane. I feel very sad about it.”

Although he was not one of the new recruits, he protested with them in support, adding: “If today I remain silent about the suffering of others, who will speak out for me tomorrow?”

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Business

Zhengzhou, China: Protesters at Foxconn factory clash with police, videos show

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Beijing/Hong Kong
CNN Business
 — 

Workers at China’s largest iPhone assembly factory were seen confronting police, some in riot gear, on Wednesday, according to videos shared over social media.

The videos show hundreds of workers facing off with law enforcement officers, many in white hazmat suits, on the Foxconn campus in the central Chinese city of Zhengzhou. In the footage, now blocked, some of the protesters could be heard complaining about their pay and sanitary conditions.

The scenes come days after Chinese state media reported that more than 100,000 people had signed up to fill positions advertised as part of a massive recruitment drive held for Foxconn’s Zhengzhou plant.

Apple

(AAPL) has been facing significant supply chain constraints at the assembly facility and expects iPhone 14 shipments to be hit just as the key holiday shopping season begins. CNN has contacted the company for comment on the situation at the plant.

A Covid outbreak last month had forced the site to lock down, leading some anxious factory workers to reportedly flee.

Videos of many people leaving Zhengzhou on foot had gone viral on Chinese social media earlier in November, forcing Foxconn to step up measures to get its staff back. To try to limit the fallout, the company said it had quadrupled daily bonuses for workers at the plant this month.

On Wednesday, workers were heard in the video saying that Foxconn failed to honor their promise of an attractive bonus and pay package after they arrived to work at the plant. Numerous complaints have also been posted anonymously on social media platforms — accusing Foxconn of having changed the salary packages previously advertised.

In a statement in English, Foxconn said Wednesday that “the allowance has always been fulfilled based on contractual obligation” after some new hires at the Foxconn campus in Zhengzhou appealed to the company regarding the work allowance on Tuesday.

Workers were also heard in the videos complaining about insufficient anti-Covid measures, saying workers who tested positive were not being separated from the rest of the workforce.

Foxconn said in the English statement that speculation online about employees who are Covid positive living in the dormitories of the Foxconn campus in Zhengzhou is “patently untrue.”

“Before new hires move in, the dormitory environment undergoes standard procedures for disinfection, and it is only after the premise passes government check, that the new employees are allowed to move in,” Foxconn said.

Searches for the term “Foxconn” on Chinese social media now yield few results, an indication of heavy censorship.

“Regarding violent behaviors, the company will continue to communicate with employees and the government to prevent similar incidents from happening again,” Foxconn said in a statement in Chinese.

The Zhengzhou facility is the world’s largest iPhone assembly site. It typically accounts for approximately 50% to 60% of Foxconn’s global iPhone assembly capacity, according to Mirko Woitzik, global director of intelligence solutions at Everstream, a provider of supply chain risk analytics.

Apple warned earlier this month of the disruption to its supply chain, saying that customers will feel an impact.

“We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated,” the tech giant said in a statement. “Customers will experience longer wait times to receive their new products.”

As of last week, the wait time for those models had reached 34 days in the United States, according to a report from UBS.

Public frustration has been mounting under China’s unrelenting zero-Covid policy, which continues to involve strict lockdowns and travel restrictions nearly three years into the pandemic.

Last week, that sentiment was on display as social media footage showed residents under lockdown in Guangzhou tearing down barriers meant to confine them to their homes and taking to the streets in defiance of strictly enforced local orders.

— Michelle Toh, Simone McCarthy, Wayne Chang, Juliana Liu, and Kathleen Magramo contributed to this report.

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Business

S&P 500 Tops Key Level In Market Rally; Riots Hit Apple iPhone Factory In China

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Dow Jones futures tilted higher early Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally rebounded Tuesday, with the S&P 500 retaking the 4,000 level. A huge Apple iPhone factory in China faced riots overnight amid Covid restrictions.




X



Deere (DE) reported better-than-expected earnings early Wednesday. DE stock jumped in premarket trade, signaling a move out of buy zone.

Deere earnings and guidance are important for a variety of agriculture stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM), as well as machinery makers such as Caterpillar (CAT).

Energy stocks continue to do well. Solar leader Enphase Energy (ENPH), coal producer Peabody Energy (BTU), refiner CVR Energy (CVI), natural gas producer EQT Corp. (EQT) and LNG stock Excelerate Energy (EE) are all near buy points.

EE stock broke out on Wednesday, with Enphase moving back into a buy zone. BTU stock, CVR Energy and EQT are actionable.

ENPH stock is on IBD Leaderboard. EQT stock is on SwingTrader. Deere stock is on the IBD 50. Peabody Energy is Tuesday’s IBD Stock Of The Day.

Apple iPhone Factory Riots

Riots broke out overnight at a Apple’s biggest iPhone factory in China, as hundreds of employees clashed with security. Over 100,000 workers have been forced to live on the Foxconn campus in Zhengzhou for weeks due to Covid concerns, with many reportedly not paid during that time.

Protests also are picking up elsewhere amid renewed lockdowns and severe restrictions across much of China as Covid cases surge.

Apple recently warned that Apple iPhone 14 Pro models would be in short supply due to the Foxconn factory in Zhengzhou.

Apple stock fell a fraction early Wednesday. AAPL rose 1.5% to 150.18 on Tuesday, finding support near its 50-day line but still below its 200-day moving average.

Dow Jones Futures Today

Dow Jones futures were up 0.1% vs. fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures climbed 0.1%.

The 10-year Treasury yield rose 1 basis point to 3.77%.

Crude oil futures fell more than 2%. U.S. natural gas prices jumped 7%. On Tuesday, Europe released details on a natural price cap, starting for one year as of Jan. 1, that’s more than double current levels.

New Zealand’s central bank hiked rates by a record 75 basis points, as expected.

Fed minutes from the November meeting will be released Wednesday.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally opened mixed Tuesday but gained stream for broad-based gains, closing near session highs.

The Dow Jones Industrial Average rose 1.2% in Tuesday’s stock market trading. The S&P 500 index and Nasdaq composite both jumped nearly 1.4%. The small-cap Russell 2000 popped 1.1%.

The 10-year Treasury yield fell 7 basis points to 3.76%. But the two-year Treasury yield, more closely tied to Fed policy, was roughly flat at 4.53%.

The dollar, after rallying for the prior three sessions, fell back on Wednesday. The greenback has fallen significantly since late September, especially from early November.

U.S. crude oil prices rose 1.1% to $80.95 a barrel, continuing a rebound from Monday’s short-lived dive. Gasoline futures jumped 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% intraday.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) jumped 3.4%, helped by a number of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.8%. The VanEck Vectors Semiconductor ETF (SMH) popped 2.9%.

SPDR S&P Metals & Mining ETF (XME) gained 3.2%, and the Global X U.S. Infrastructure Development ETF (PAVE) tacked on 1.3%. SPDR S&P Homebuilders ETF (XHB) rebounded 1.9%. The Energy Select SPDR ETF (XLE) climbed 3.1%. The Health Care Select Sector SPDR Fund (XLV) edged up 0.9% to a seven-month high.

Reflecting stocks with more speculative stories, ARK Innovation (ARKK) eked out a 0.3% gain and ARK Genomics (ARKG) dipped 0.4%.

Five Best Chinese Stocks To Watch Now

Energy Stocks Near Buy Points

Enphase stock rose 4% to 320.44, closing above a 316.97 cup-with-handle buy point for the first time. However, the last three times ENPH stock got up to these areas, it reversed lower. Enphase stock tends to have big daily swings. So investors might look to see if ENPH stock pulls back to its fast-rising 21-day moving average.

Some other LNG stocks are showing strength, with Flex LNG (FLNG) breaking out and Cheniere Energy (LNG) reclaiming its 50-day line.

BTU stock jumped 6.7% to 29.62, just below a 30.15 handle buy point in a seven-month consolidation. Tuesday’s move broke the trendline of the handle, offering an early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day. The handle formed after strong Peabody Energy earnings.

CVR Energy stock rose 4.85% to 40.85, back above an old 39.81 buy point that could still be viewed as valid. Also, CVI stock has a three-weeks-tight pattern with a 42.31 entry. Getting above 41.31 might offer an early entry into that tight pattern.

EQT stock jumped nearly 6% to 43.79, breaking back above the 50-day line after rebounding from the 200-day on Monday. Shares are breaking a downward-sloping trendline. The official buy point is 52.07.

EE stock surged 9.6% to 30, clearing a 28.49 cup-with-handle buy point in above-average volume, according to MarketSmith analysis. That move to a record close cleared a lot of trading that took place going back to Excelerate Energy’s April IPO. EE stock had flashed early entries on Friday and Monday, though trade was below normal on those days. Excelerate is now slightly extended from the buy zone and well-extended from the 21-day line.

Market Rally Analysis

The stock market rally continues to show constructive action, trading in a narrow range after a modest pullback and support last week. On Tuesday, the major indexes bounced back from Monday’s losses.

The S&P 500 rebounded from its 10-day line, right at the 4,000 level, as it moves toward its 200-day line. While not above the Nov. 15 intraday high, it was the index’s best close in more than two months.

The 50-day line is just starting to turn higher on the S&P 500.

The Russell 2000 is getting very close to its 200-day. The S&P MidCap 400, which held its 200-day line last week, made further gains.

The leading Dow Jones topped the 34,000 level for the first time in three months, just below the Aug. 16 peak. The laggard Nasdaq found support at its 21-day line, just above its 50-day, but didn’t recoup all of Monday’s losses.

All of these indexes are working on handles, with the Dow sneaking above. Most stocks follow the major indexes’ action, so a lot of handles are forming on stocks near buy points. A slightly longer pause, perhaps until key economic reports late next week, would let moving averages start to catch up.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

Until the S&P 500 moves decisively above its 200-day line, investors may not want to add much exposure right now. With the Thanksgiving holiday muting trading and Fed-critical economic data next week, the market rally could be rangebound in the short run.

That could help stocks from a variety of sectors set up handles and have moving averages gain ground. Investors should be building up their watchlists. It’s definitely a time to be looking beyond traditional tech growth stocks, which are mostly lagging right now.

Given that many leaders are extended from moving averages, such as Excelerate Energy or BTU stock, it’s all the more important to be looking for early entries and acting quickly.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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World

China widens COVID curbs, iPhone factory unrest adds to economy worries

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  • COVID restrictions ramped up as cases rise
  • iPhone factory unrest underscores industrial, social risks
  • Analysts warn of potential for wider lockdowns
  • Resort city Sanya imposes movement curbs on new arrivals

BEIJING, Nov 23 (Reuters) – Chinese cities imposed more curbs on Wednesday to rein in rising coronavirus cases, adding to investor worries about the economy, as fresh unrest at the world’s largest iPhone plant highlighted the social and industrial toll of China’s strict COVID-19 measures.

In Beijing, malls and parks were shut and once-bustling areas of the capital resembled ghost towns as authorities urged people to stay home.

The Hainan island resort city of Sanya barred people from going to restaurants and malls within three days of arrival, and numerous cities across China have imposed localised lockdowns as infections neared highs seen in April.

The measures are darkening the outlook for the world’s second-largest economy and dampening hopes that China would significantly ease its outlier COVID stance any time soon, as China faces its first winter battling the highly contagious Omicron variant.

“While there is little prospect of the authorities opting to step back from the zero-COVID policy during the winter, there is a significant risk that containment efforts fail,” analysts at Capital Economics wrote.

Such a failure could result in more lockdowns which would cause unprecedented damage to the economy, they said.

China’s COVID curbs, the tightest in the world, have fuelled widespread discontent and disrupted production at manufacturers including Taiwan’s Foxconn (2317.TW), Apple Inc’s biggest iPhone supplier.

On Wednesday, footage uploaded on social media showed Foxconn workers pulling down barriers and fighting with authorities in hazmat suits, chanting “give us our pay”. The unrest follows weeks of turmoil which has seen scores of employees leave the factory over COVID controls. The videos could not be immediately verified by Reuters.

Localities accounting for nearly one-fifth of China’s total GDP are under some form of lockdown or curbs, brokerage Nomura estimated earlier this week, a figure that would exceed the GDP of Britain.

TESTING RESOLVE

Even though infection numbers are low by global standards, China has stuck with its zero-COVID approach, a signature policy of President Xi Jinping that officials argue saves lives and prevents the medical system from being overwhelmed.

China reported 28,883 new domestically transmitted cases for Tuesday.

The International Monetary Fund urged China to further recalibrate its COVID-19 strategy and boost vaccination rates.

“Although the zero-COVID strategy has become nimbler over time, the combination of more contagious COVID variants and persistent gaps in vaccinations have led to the need for more frequent lockdowns, weighing on consumption and private investment,” IMF official Gita Gopinath said.

Residents are increasingly fed up with nearly three years of restrictions, and Wednesday’s protest at the Foxconn factory in Zhengzhou comes after crowds recently crashed through barriers and clashed with hazmat-suit-clad workers in the southern city of Guangzhou.

The rising case numbers are also testing China’s resolve to avoid one-size-fits-all measures such as mass lockdowns to curb outbreaks, and rely on recently tweaked COVID rules instead.

However, unofficial lockdowns have increased, including in residential buildings and compounds in Beijing, where case numbers hit a new high on Tuesday.

In Shanghai, a city of 25 million that was locked down for two months earlier this year, China’s top auto association said on Wednesday it would cancel the second day of the China Automotive Overseas Development Summit being held there over COVID concerns.

Chengdu, with 428 cases on Tuesday, became the latest city to announce mass testing.

Major manufacturing hubs Chongqing and Guangzhou have seen persistently high infection numbers, accounting for most of China’s caseload. Cases in Guangzhou fell slightly on Tuesday to 7,970 and authorities have said infections continue to be concentrated in key areas of Haizhu district.

Investors who last week were hopeful that China would ease restrictions have grown worried that the infection wave could slow economic reopening. read more Many analysts say a significant easing of COVID curbs is unlikely before March or April.

A sharper than expected slowdown in China, which is hurting domestic demand in particular, would reverberate across countries including Japan, South Korea and Australia, which export hundreds of billions of dollars worth of products and commodities to the world’s second largest economy.

Analysts are also cutting forecasts for oil demand from the world’s top crude importer, with recent COVID curbs already driving global oil futures lower.

“The next few weeks could be the worst in China since the early weeks of the pandemic both for the economy and the healthcare system,” said analysts at Capital Economics.

Reporting by Beijing and Shanghai newsrooms; Writing by Bernard Orr; Editing by Muralikumar Anantharaman, Miral Fahmy, Tony Munroe and Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

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World

Henan, China: Factory fire kills 38 people, state media reports

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CNN
 — 

A fire at a factory in central China killed dozens of people on Monday, according to Chinese state-media, the latest in a string of fatal industrial accidents to hit the country in recent years.

State run-newspaper Henan Daily reported Tuesday that two people previously reported missing had been found dead following the blaze at the factory in Anyang, Henan province, bringing the death toll to 38.

Two others were being treated for minor injuries, state broadcaster CCTV reported Tuesday.

Police have detained an unspecified number of suspects in connection with the blaze, which took firefighters nearly seven hours to put out, according to CCTV.

According to preliminary findings, the fire was caused by violations of electrical welding protocols, Henan Daily reported, citing authorities.

China has seen a spate of industrial accidents in recent years that have left scores dead, raising concerns about public safety.

In 2015, at least 173 people died after a series of explosions at a chemical warehouse in the northern port city of Tianjin.

Last October, at least three people were killed and more than 30 injured in a powerful explosion at a restaurant in the northeastern city of Shenyang. The gas explosion took place in a mixed-use residential and commercial building.

And in June this year, at least one person was killed after a fire broke out at a petrochemical complex in Shanghai.

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World

Dozens dead in factory fire in Chinese city of Anyang – state media | China

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Thirty-six people have died and two are missing after a fire at a factory in central China, state media has reported, citing local authorities.

The fire took place at a plant in Anyang city, in the central Henan Province on Monday afternoon, news agency Xinhua reported on Tuesday, without sharing further details.

State media said rescue services first received reports of a fire at 4.22pm, at Kaixinda Trading Co Ltd, in the Wenfeng district, or “high-tech zone”, in Anyang city. “After receiving the alarm, the municipal fire rescue detachment immediately dispatched forces to the scene,” broadcaster CCTV reported.

“Public security, emergency response, municipal administration, and power supply units rushed to the scene at the same time to carry out emergency handling and rescue work,” it said, adding the fire had been extinguished by around 11pm.

In addition to the dead and missing, two are in hospital with non-life-threatening injuries, CCTV reported.

Authorities said “criminal suspects” had been taken into custody in connection with the fire, but did not provide further details.

Industrial accidents are common in China due to weak safety standards and corruption among officials tasked with enforcing them.

In June, one person was killed and another injured in an explosion at a chemical plant in Shanghai. The fire at a Sinopec Shanghai Petrochemical Co plant in the outlying Jinshan district sent thick clouds of smoke over a vast industrial zone as three fires blazed in separate locations.

Last year, a gas blast killed 25 people and reduced several buildings to rubble in the central city of Shiyan.

In March 2019, an explosion at a chemical factory in Yancheng, located 260km (161 miles) from Shanghai, killed 78 people and devastated homes in a several-kilometre radius.

Four years prior, a giant explosion in northern Tianjin at a chemical warehouse killed 165 people, one of China’s worst-ever industrial accidents.

With Agence France-Presse and Reuters

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