Tag Archives: Foxconn Technology Co Ltd

China’s factory activity fell in October bogged down by Covid controls

China’s factory activity declined in October, official data showed Monday. Pictured here on Oct. 27, 2022, in Jiangsu province is an aluminum products company.

Vcg | Visual China Group | Getty Images

BEIJING — China’s factory activity fell in October due to frequent Covid outbreaks, the National Bureau of Statistics said Monday.

The official purchasing managers’ index for manufacturing fell to 49.2 this month, down from 50.1 in September, the data showed.

Economists had expected a print of 50, according to analysts polled by Reuters.

Readings below 50 indicate a contraction in business activity, while figures 50 above reflect expansion. The index surveys businesses on operating conditions.

The index has come in below 50 for six out of 10 months of the year so far.

Sub-indicators on factory employment, production, new orders and supplier delivery time all showed contraction in October compared to September.

“The decline in the manufacturing PMI was driven especially by a drop in the new orders sub-index (to 48.1 in October from 49.8 in September), pointing to weaker future demand,” Nomura’s Chief China Economist Ting Lu said in a note.

He pointed out the employment sub-index has now been in contraction territory for 19 straight months.

Foxconn and Covid

Services activity drops

China’s services activity declined in October for the first time since May, data released Monday showed.

The non-manufacturing purchasing managers’ index came in at 48.7 in October.

However, the statistics bureau said sub-indicators for postal services, internet software and information technology services were above 60 in anticipation of a pickup in business for the Singles Day shopping festival in November.

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Services and consumption have been weak since the pandemic began nearly three years ago.

Goldman Sachs’ analysis found the GDP contribution from hotel and restaurant services is nearly 20% below the 2019 trend.

Industrial sector GDP is in line with the 2019 trend, thanks to strong overseas demand, the analysts said.

They noted how agriculture has outperformed its pre-pandemic trend as Beijing has emphasized food supply security.

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GM sells its stake in embattled EV start-up Lordstown Motors

The Lordstown Motors factory is where GM once operated, in Lordstown, Ohio, on October 16, 2020.

Megan Jelinger | AFP | Getty Images

General Motors sold its stake in Lordstown Motors during the fourth quarter following an undisclosed lock-up period, the Detroit automaker confirmed Tuesday.

GM owned 7.5 million shares of common stock in Lordstown as part of a SPAC deal that took the Ohio-based automaker public in October 2020. The shares had an initial equity value of $75 million. They were given in exchange for in-kind contributions and $25 million in cash GM’s stake was less than 5%.

The disclosure comes after Lordstown on Monday announced underwhelming plans to produce and sell up to only 3,000 vehicles through next year, including 500 in 2022. Both are far below the amount former management sold investors on in the runup to the public listing. 

GM spokesperson Jim Cain declined to disclose exact timing of the open market sales or the net proceeds, saying the total wasn’t material.

The share sale was somewhat expected. GM’s involvement in the company was a goodwill gesture to assist in getting the Lordstown Assembly plant back up and running following the automaker ending production there in 2019.

“Our objective in investing was to allow them to complete the purchase of the plant and restart production,” Cain said.

Lordstown recently started producing preproduction models of its first vehicle, an all-electric pickup truck called the Endurance, at the plant. It plans to begin customer deliveries during the third quarter of this year.

In the fourth quarter, Lordstown announced a deal with iPhone maker Foxconn to purchase the plant for $230 million. The deal includes Foxconn, which is formally known as Hon Hai Technology Group, handling production of the Endurance pickup truck.

The deal is still being finalized, Lordstown executives said Monday. They’re also in negotiations for the two companies to co-develop vehicles in the future. Lordstown CEO Dan Ninivaggi characterized the deal as a critical component to the company’s future success.

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Stocks making the biggest moves midday: Merck, Moderna and more

Check out the companies making headlines in midday trading.

Merck — Shares surged more than 9% after it announced its new antiviral pill cut the risk of death or hospitalization by 50% for Covid patients. The pharmaceutical company plans to file for emergency use authorization.

Moderna, Regeneron — Companies with other Covid-19 drugs fell after Merck’s oral pill showed positive data in a clinical trial. Moderna’s stock fell nearly 13%, while shares of Regeneron dropped more than 5%.

United Airlines, Delta Air Lines, American Airlines, Southwest Airlines — Airline stocks rallied as Merck’s oral Covid drug showed promising results. United Airlines rose nearly 6%, Delta Air Lines gained more than 5% and American Airlines rallied roughly 4%. Southwest Airlines jumped more than 4% as well following an upgrade on the stock by JPMorgan.

Penn National Gaming, Hilton Worldwide, Norwegian Cruise Line — Travel and entertainment stocks jumped following the positive results from Merck’s Covid pill. Penn National Gaming rallied more than 6%, Live Nation Entertainment added about 5%, Hilton Worldwide gained more than 4% and Norwegian Cruise Line rose nearly 4.8%.

Lordstown Motors — Lordstown Motors saw its stock sink more than 15% after it announced an agreement to sell its Ohio assembly plant to iPhone maker Foxconn for $230 million. Shares of Lordstown Motors had rallied by as much as 21% by Thursday as reports indicated the deal was in the works.

Zoom Video Communications — Zoom and Five9 terminated what would have been a $14.7 billion deal. Five9 shareholders rejected the proposed acquisition by Zoom. Zoom shares gained 2.2% and Five9 shares rose 3.2%.

Walt Disney — Shares of the media giant popped 3% on news that Disney and Scarlett Johansson settled a lawsuit involving the “Black Widow” movie. Johansson had sued Disney over the release of the movie on the Disney+ streaming service at the same time it was debuting in theaters.

Exxon Mobil – The oil giant advanced more than 2% after the company updated Wall Street on its expected third-quarter results. In a filing with the Securities and Exchange Commission, Exxon said that higher oil and gas prices could lift earnings by as much as $1.5 billion. Analysts at Bank of America said the company is on track for its highest earnings per share since the third quarter of 2014.

International Flavors & Fragrances – Shares of International Flavors popped more than 6% after the company announced its chief executive Andreas Fibig plans to retire. The company said Fibig will remain at the helm of the company until a successor is found.

— CNBC’s Jesse Pound and Maggie Fitzgerald contributed reporting

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Merck, Lordstown Motors, Coty, Zoom and others

Check out the companies making headlines before the bell:

Merck (MRK) – Merck shares surged 7.5% in the premarket after it announced that its experimental Covid-19 pill cut the risk of death and hospitalization by 50% in a late-stage study. Merck plans to file for emergency use authorization as soon as possible.

Lordstown Motors (RIDE) – Lordstown struck a deal to sell its Ohio plant to Taiwan’s Foxconn for $230 million, with Foxconn taking over the manufacturing of Lordstown’s full-sized electric pickup truck. It was reported earlier this week that a deal between the two sides was near. Lordstown rallied 6.3% in premarket trading.

Coty (COTY) – The cosmetics company’s stock gained 2% in the premarket as it announced a deal to sell another 9% stake in its Wella beauty business to private equity firm KKR (KKR). In return, KKR will redeem about half its remaining convertible preferred shares in Wella, reducing Coty’s stake to about 30.6%. Coty had sold a 60% stake in Wella to KKR last December.

Zoom Video Communications (ZM) – Zoom and Five9 (FIVN) have terminated a nearly $15 billion deal by mutual consent. Zoom had struck a deal to buy the contact center operator, but it was rejected by Five9 shareholders. The two sides will continue a partnership that had been in place prior to the proposed transaction. Zoom jumped 4% in the premarket while Five9 slid 1.4%.

Walt Disney (DIS) – Disney and Scarlett Johansson have settled a lawsuit involving the “Black Widow” movie. Johansson had sued Disney over the release of the movie on the Disney+ streaming service at the same time it was debuting in theaters. Terms of the settlement weren’t disclosed.

Wells Fargo (WFC) – Wells Fargo will have to face a shareholder fraud lawsuit involving its attempt to rebound from years of scandals. A judge rejected the bank’s moved to have the suit dismissed, saying it was plausible that statements by various Wells Fargo officials about the recovery were false or misleading.

Exxon Mobil (XOM) – Exxon Mobil said in an SEC filing that higher oil and gas prices could boost third-quarter earnings by as much as $1.5 billion. Exxon profits have been improving amid the rising prices as well as cost cuts by the energy giant.

Nio (NIO) – Nio reported deliveries of 10,628 vehicles in September, a 126% increase over a year ago for the China-based electric vehicle maker. Nio added 1.8% in the premarket.

International Flavors (IFF) – The maker of food flavoring and cosmetic ingredients said Chairman and Chief Executive Officer Andreas Fibig plans to retire, although he’ll remain at the helm of the company until a successor is found. Shares added 2.5% in premarket action.

Jefferies Financial Group (JEF) – Jefferies reported a quarterly profit of $1.50 per share, beating the 99-cent consensus estimate, with the financial services company’s revenue also topping Wall Street forecasts. Jefferies saw its results boosted by a strong performance in its investment banking business. Jefferies gained 1.4% in the premarket.

MGM Resorts (MGM) – Susquehanna Financial downgraded MGM to “negative” from “neutral,” saying the DraftKings (DKNG) bid for British gambling company Entain weakens MGM’s prospects in the digital gaming and betting market.

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