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Business

S&P 500, Nasdaq snap losing streaks after jobless claims rise

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  • Weekly jobless claims rise in line with estimates
  • Moderna, Pfizer up as FDA authorizes updated COVID boosters
  • Exxon climbs after boosting buyback program
  • Indexes up: Dow 0.55%, S&P 0.75%, Nasdaq 1.13%

Dec 8 (Reuters) – The S&P 500 (.SPX) ended higher on Thursday, snapping a five-session losing streak, as investors interpreted data showing a rise in weekly jobless claims as a sign the pace of interest rate hikes could soon slow.

Wall Street’s main indexes had come under pressure in recent days, with the S&P 500 shedding 3.6% since the beginning of December on expectations of a longer rate-hike cycle and downbeat economic views from some top company executives.

Such thinking had also weighed on the Nasdaq Composite (.IXIC), which had posted four straight losing sessions prior to Thursday’s advance on the tech-heavy index.

Stocks rose as investors cheered data showing the number of Americans filing claims for jobless benefits increased moderately last week, while unemployment rolls hit a 10-month high toward the end of November.

The report follows data last Friday that showed U.S. employers hired more workers than expected in November and increased wages, spurring fears that the Fed might stick to its aggressive stance to tame decades-high inflation.

Markets have been swayed by data releases in recent days, with investors lacking certainty ahead of Federal Reserve guidance next week on interest rates.

Such behavior means Friday’s producer price index and the University of Michigan’s consumer sentiment survey will likely dictate whether Wall Street can build on Thursday’s rally.

“The market has to adjust to the fact that we’re moving from a stimulus-based economy – both fiscal and monetary – into a fundamentals-based economy, and that’s what we’re grappling with right now,” said Wiley Angell, chief market strategist at Ziegler Capital Management.

The Dow Jones Industrial Average (.DJI) rose 183.56 points, or 0.55%, to close at 33,781.48; the S&P 500 (.SPX) gained 29.59 points, or 0.75%, to finish at 3,963.51; and the Nasdaq Composite (.IXIC) added 123.45 points, or 1.13%, at 11,082.00.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

Nine of the 11 major S&P 500 sectors rose, led by a 1.6% gain in technology stocks (.SPLRCT).

Most mega-cap technology and growth stocks gained. Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Amazon.com Inc (AMZN.O) rose between 1.2% and 6.5%.

Microsoft Corp (MSFT.O) ended 1.2% higher, despite giving up some intraday gains after the Federal Trade Commission filed a complaint aimed at blocking the tech giant’s $69 billion bid to buy Activision Blizzard Inc . The “Call of Duty” games maker closed 1.5% lower.

The energy index (.SPNY) was an exception, slipping 0.5%, despite Exxon Mobil Corp (XOM.N) gaining 0.7% after announcing it would expand its $30-billion share repurchase program. The sector had been under pressure in recent sessions as commodity prices slipped: U.S. crude is now hovering near its level at the start of 2022.

Meanwhile, Moderna Inc (MRNA.O) advanced 3.2% after the U.S. Food and Drug Administration authorized COVID-19 shots from the vaccine maker that target both the original coronavirus and Omicron sub-variants for use in children as young as six months old.

The regulator also approved similar guidance for fellow COVID vaccine maker Pfizer Inc (PFE.N), which rose 3.1%, and its partner BioNTech, whose U.S.-listed shares gained 5.6%.

Rent the Runway Inc (RENT.O) posted its biggest ever one-day gain, jumping 74.3%, after the clothing rental firm raised its 2022 revenue forecast.

Volume on U.S. exchanges was 10.07 billion shares, compared with the 10.90 billion average for the full session over the last 20 trading days.

The S&P 500 posted 15 new 52-week highs and three new lows; the Nasdaq Composite recorded 82 new highs and 232 new lows.

Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian in Bengaluru and David French in New York; Editing by Vinay Dwivedi, Sriraj Kalluvila, Anil D’Silva and Richard Chang

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Business

Apple and Amazon resume advertising on Twitter, reports say

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Dec 3 (Reuters) – Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O) are planning to resume advertising on Twitter, according to media reports on Saturday.

The developments follow an email sent by Twitter on Thursday to advertising agencies offering advertisers incentives to increase their spending on the platform, an effort to jump-start its business after Elon Musk’s takeover prompted many companies to pull back.

Twitter billed the offer as the “biggest advertiser incentive ever on Twitter,” according to the email reviewed by Reuters. U.S. advertisers who book $500,000 in incremental spending will qualify to have their spending matched with a “100% value add,” up to a $1 million cap, the email said.

On Saturday, a Platformer News reporter tweeted that Amazon is planning to resume advertising on Twitter at about $100 million a year, pending some security tweaks to the company’s ads platform.

The Amazon logo is seen outside its JFK8 distribution center in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid

However, a source familiar with the matter told Reuters that Amazon had never stopped advertising on Twitter.

Separately, during a Twitter Spaces conversation, Musk announced that Apple is the largest advertiser on Twitter and has “fully resumed” advertising on the platform, according to a Bloomberg report.

Musk’s first month as Twitter’s owner has included a slashing of staff including employees who work on content moderation and incidents of spammers impersonating major public companies, which has spooked the advertising industry.

Many companies from General Mills Inc (GIS.N) to luxury automaker Audi of America stopped or paused advertising on Twitter since the acquisition, and Musk said in November that the company had seen a “massive” drop in revenue.

Apple and Twitter did not immediately respond to Reuters request for comment on the matter.

Reporting by Juby Babu and Akriti Sharma in Bengaluru; Additional reporting by Rhea Binoy; Editing by Lincoln Feast and Daniel Wallis

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Business

S&P 500 ends down as Apple dips and traders eye Powell speech

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  • Investors look to Powell speech for interest rate clues
  • U.S. consumer confidence slips in November
  • S&P 500 -0.16%, Nasdaq -0.59%, Dow +0.01%

Nov 29 (Reuters) – The S&P 500 ended down on Tuesday, with losses in Apple and Amazon ahead of an upcoming speech by U.S. Federal Reserve Chair Jerome Powell that could provide hints about magnitude of future interest rate hikes.

Investors also focused on recent protests against COVID-19 curbs in China, including at the world’s biggest iPhone factory.

Apple’s (AAPL.O) stock dropped 2.1%, down for a fourth straight session.

Powell is due to speak at a Brookings Institution event on Wednesday about the outlook for the U.S. economy and the labor market. Investors will be looking for clues about when the Fed will slow the pace of its aggressive interest rate hikes.

“No one is willing to buy ahead of tomorrow with Powell speaking. Everyone is nervous about what he is going to say,” said Ron Saba, senior portfolio manager at Horizon Investments in Charlotte.

Shares of Amazon (AMZN.O), Nvidia (NVDA.O) and Tesla (TSLA.O) each lost more than 1%.

The benchmark S&P 500 index (.SPX) is headed for its second straight month of gains in November amid bets that recent inflation readings showing a slight cooling in prices will lead the Fed to scale back the scale of its interest rate hikes.

The Fed has delivered four straight 75 basis point rate hikes, and it is expected to shift down the pace to a 50-bps move in December. FEDWATCH

A survey on Tuesday showed U.S. consumer confidence eased further in November amid persistent worries about the rising cost of living.

A specialist trader works with his son during a traditional bring-your-kids-to-work day on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 25, 2022. REUTERS/Brendan McDermid

Mainland China’s recent wave of civil disobedience comes as the number of COVID cases hit record daily highs and large parts of several cities face new lockdowns, further threatening the world’s second largest economy.

The S&P 500 energy sector index (.SPNY) rallied 1.3%, while gains in oil prices on expectations of a loosening of China’s strict COVID controls were later offset by concerns that OPEC+ would keep its output unchanged at its upcoming meeting.

The S&P 500 declined 0.16% to end the session at 3,957.60 points.

The Nasdaq declined 0.59% to 10,983.78 points, while Dow Jones Industrial Average rose 0.01% to 33,852.13 points.

Despite the S&P 500’s decline, advancing issues outnumbered falling ones (.AD.SPX) by a 1.3-to-one ratio.

The S&P 500 posted three new highs and two new lows; the Nasdaq recorded 68 new highs and 183 new lows.

U.S.-listed shares of Chinese companies Alibaba Group Holding Ltd , Pinduoduo Inc (PDD.O) and JD.com Inc jumped more than 5% after China broadened equity financing channels for property developers.

Shares of Chinese internet firm Bilibili Inc soared 22% after posting upbeat quarterly results.

Volume on U.S. exchanges was relatively light, with 9.6 billion shares traded, compared with an average of 11.2 billion shares over the previous 20 sessions.

Reporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru and by Noel Randewich in Oakland, Calif.; Editing by Marguerita Choy and Shounak Dasgupta

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Business

Foxconn’s woes to take bigger toll on giant China iPhone plant as more workers leave – source

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  • Foxconn Zhengzhou plant’s Nov shipments to fall further – source
  • Worker unhappiness at plant escalated into protests this week
  • Over 20,000 workers, mostly new recruits, have left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s (2317.TW) flagship iPhone plant in China is set to see its November shipments further reduced by the latest bout of worker unrest this week, a source with direct knowledge of the matter said on Friday, as thousands of employees left the site.

The company could now see more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the factory’s worker troubles started in late October, the source said.

The site, which is the only factory where Foxconn makes premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month, the source added.

The world’s largest Apple (AAPL.O) iPhone factory has been grappling with strict COVID-19 restrictions that have fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either put into isolation or fled the plant.

It has fuelled concerns over Apple’s ability to deliver products for the busy holiday period.

On Wednesday workers, most of whom were new recruits hired in recent weeks, clashed with security personnel at the Zhengzhou plant in central China.

Many claimed they were misled over compensation benefits at the factory, and others complained about sharing dormitories with colleagues who had tested positive for COVID.

Foxconn apologised for a pay-related “technical error” when hiring on Thursday, and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and leave.

The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left. Videos posted on Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses.

[1/2] The logo of Foxconn is seen outside the company’s building in Taipei, Taiwan November 10, 2022. REUTERS/Ann Wang

“It’s time to go home,” one person posted.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said on Thursday it had staff at the factory, did not immediately respond to a request for comment on Friday.

The plant, before its woes began, employed more than 200,000 staff. It has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million-square-metre (15 million-square-foot) facility.

Another Foxconn source familiar with the matter said some new hires had left the campus but did not elaborate on how many. This person said that because the people leaving had not yet been trained or begun to work, their departures would not cause further harm to current production.

“The incident has a big impact on our public image but little on our (current) capacity. Our current capacity is not affected,” the source said.

“There’s only so much corporate can do on pandemic prevention … It’s been a problem for a while. This is a problem faced by everyone,” the person said, pointing to other worker unrest triggered by rigid COVID restrictions, including upheaval at another Apple supplier, Quanta (2382.TW), in May.

Foxconn shares closed down 0.5%, lagging the broader market, (.TWII) which ended flat.

Hundreds of workers joined protests at Foxconn’s major iPhone plant China’s Zhengzhou this week, with some men smashing surveillance cameras and windows, footage uploaded on social media showed.

($1 = 7.1616 Chinese yuan renminbi)

Reporting By Yimou Lee; Additional reporting by Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

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Business

Foxconn apologises for pay-related error at China iPhone plant after worker unrest

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  • Foxconn says it is working with staff to resolve disputes
  • Major iPhone factory rocked by protests over pay, conditions
  • Apple says it has team on the ground in Zhengzhou

TAIPEI/SHANGHAI, Nov 24 (Reuters) – Foxconn (2317.TW) said on Thursday a pay-related “technical error” occurred when hiring new recruits at a COVID-hit iPhone factory in China and apologised to workers after the company was rocked by fresh labour unrest.

Men smashed surveillance cameras and clashed with security personnel as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou city on Wednesday, in rare scenes of open dissent in China sparked by claims of overdue pay and frustration over severe COVID-19 restrictions.

Workers said on videos circulated on social media that they had been informed that the Apple Inc (AAPL.O) supplier intended to delay bonus payments. Some workers also complained they were forced to share dormitories with colleagues who had tested positive for COVID.

“Our team has been looking into the matter and discovered a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.

“We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and the official recruitment posters.” It did not elaborate on the error.

The apology was an about-face from a day earlier when Foxconn said it had fulfilled its payment contracts.

The unrest comes at a time when China is logging record numbers of COVID-19 infections and grappling with more and more lockdowns that have fuelled frustration among citizens across the country. But it has also exposed communication problems and a mistrust of Foxconn management among some staff.

The largest protests had died down and the company was communicating with employees engaged in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “initial agreements” with employees to resolve the dispute and production at the plant was continuing.

Mounting worker discontent over COVID outbreaks, strict quarantine rules and shortages of food had seen many employees flee the enclosed factory campus since October after management implemented a so-called closed-loop system that isolated the plant from the wider world.

Many of new recruits had been hired to replace the workers who had fled – estimated by some former staff to number thousands.

The Taiwanese company said it would respect the wishes of new recruits who wanted to resign and leave the factory campus, and would offer them “care subsidies”. The Foxconn source said the subsidies amounted to 10,000 yuan ($1,400) per worker.

APPLE RISKS

Home to over 200,000 workers, Foxconn’s Zhengzhou plant has dormitories, restaurants, basketball courts and a football pitch across its sprawling roughly 1.4 million square metre facility.

The factory makes Apple devices including the iPhone 14 Pro and Pro Max, and accounts for 70% of iPhone shipments globally.

Reuters Graphics Reuters Graphics

Apple said it had staff at the factory and was “working closely with Foxconn to ensure their employees’ concerns are addressed”.

Several shareholder activists told Reuters the protests showed the risks Apple faces through its reliance on manufacturing in China.

“The extreme dependence of Apple on China, both as a (consumer) market and as its place of primary manufacturing, we see that a very risky situation,” said Christina O’Connell, a senior manager for SumOfUs, a nonprofit corporate accountability group.

Reuters reported last month that iPhone output at the Zhengzhou factory could slump by as much as 30% in November and that Foxconn aimed to resume full production there by the second half of the month.

The Foxconn source familiar with the matter said it was not immediately clear how much impact the worker protests might have on production for November and that it might take a few days to work that out, citing the large size of the factory.

A separate source has said the unrest had made it certain that they would not be able to resume full production by month-end.

Reuters Graphics Reuters Graphics

Apple has warned it expects lower shipments of premium iPhone 14 models than previously anticipated.

Reuters Graphics

($1 = 7.1353 Chinese yuan)

Reporting by Yimou Lee in Taipei and Brenda Goh in Shanghai; Additional reporting by Ross Kerber in Boston, Beijing Newsroom and Yew Lun Tian; Editing by Anne Marie Roantree, Stephen Coates and Edwina Gibbs

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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

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Stick-wielding men smash surveillance cameras at China iPhone plant

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SHANGHAI, Nov 23 (Reuters) – Men wielding sticks smashed surveillance cameras and windows at a massive campus owned by Apple (AAPL.O) supplier Foxconn (2317.TW) in the Chinese city of Zhengzhou, scenes broadcast live on the Kuaishou short video platform showed on Wednesday.

Hundreds of workers protested at the campus, home to the world’s largest iPhone factory, where many chanted “give us our pay”. They were surrounded by people in full hazmat suits, some carrying batons.

The images, which could not immediately be verified by Reuters, come after weeks of turmoil which have seen scores of employees flee the factory over COVID-19 controls.

Many former workers have spoken of food shortages and rigid quarantine rules, and Foxconn has had to offer incentives including bonuses to retain or lure workers. read more

Multiple people said on the livestream feeds they were protesting after being informed this week that they would receive their bonuses later than initially promised.

“Foxconn never treats humans as humans,” said one person in social media footage of the scenes.

Two sources with knowledge of the matter said there were protests at the Zhengzhou campus but declined to provide more details.

Foxconn and Apple did not immediately respond to a request for comment.

As of 0515 GMT, most of the footage had been taken down. Kuaishou did not respond to a request for comment.

Some videos showed people pulling down barriers set up to quarantine areas as part of China’s zero-COVID policy, or arguing with the hazmat-suited personnel.

Other videos showed workers complaining about the food they had been provided with while in quarantine or complaining that there were inadequate curbs in place to contain an outbreak.

Relentless controls and spot lockdowns across China have fuelled discontent across the country, hitting economic growth and escalating concerns over global supply chains as companies grapple to keep factories running as staff become infected.

Foxconn has maintained so-called closed-loop operations at the plant – a system in which staff live and work on-site isolated from the wider world – due to COVID outbreaks in Zhengzhou.

The curbs and discontent have hit production, prompting Apple to say earlier this month that it expected lower shipments of premium iPhone 14 models.

Foxconn, formally Hon Hai Precision Industry Co Ltd, is Apple’s biggest iPhone maker, accounting for 70% of iPhone shipments globally. It makes most of the phones at the Zhengzhou plant where it employs about 200,000 people, though it has other smaller production sites in India and southern China.

Reporting by Brenda Goh and Beijing Newsroom; Additional reporting by David Kirton in Shenzhen and Yimou Lee in Taipei; Editing by Edmund Klamann and Edwina Gibbs

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Business

Buffett’s Berkshire discloses $4.1 bln TSMC stake

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Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion of stock in Taiwan Semiconductor Manufacturing (2330.TW), , a rare significant foray into the technology sector by billionaire Warren Buffett’s conglomerate.

The news sent shares in TSMC up more than 6% in Taiwan on Tuesday, as it boosted investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low last month due to a sharp slowdown in global chip demand.

In a Monday regulatory filing describing its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares of TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). It exited an investment in Store Capital Corp (STOR.N), a real estate company that agreed in September to be taken private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggy back on what Berkshire buys. Larger investments are normally Buffett’s.

While Berkshire does not normally make big technology bets, it often prefers companies it perceives to have competitive advantages, often through their size.

TSMC, which makes chips for the likes of Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% jump in quarterly profit last month, but struck a more cautious note than usual on upcoming demand.

“I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.

“Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

Its more than six-year wager during the last decade in IBM Corp (IBM.N) did not pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views more as a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion equity portfolio.

Berkshire disclosed the TSMC stake about 2-1/2 months after it began reducing a decade-old, multi-billion dollar stake in BYD Co (002594.SZ), China’s largest electric car company.

In the third quarter, Berkshire added to its stakes in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (CE.N), Paramount Global (PARA.O) and RH (RH.N).

It also sold shares of Activision Blizzard Inc (ATVI.O), Bank of New York Mellon Corp (BK.N), General Motors Co (GM.N), Kroger Co (KR.N) and US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as the BNSF railroad, the Geico auto insurer, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

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World

China’s COVID epicentre shifts to Guangzhou as outbreaks widen

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  • Southern manufacturing hub fighting worst COVID-19 flare-up
  • Cases double in Zhengzhou, production base for Apple supplier
  • Chinese stocks, currency slip over virus fears

BEIJING, Nov 8 (Reuters) – New coronavirus cases surged in Guangzhou and other Chinese cities, official data showed on Tuesday, with the global manufacturing hub becoming China’s latest COVID-19 epicentre and testing the city’s ability to avoid a Shanghai-style lockdown.

Nationwide, new locally transmitted infections climbed to 7,475 on Nov. 7, according to China’s health authority, up from 5,496 the day before and the highest since May 1. Guangzhou accounted for nearly a third of the new infections.

The increase was modest by global standards but significant for China, where outbreaks are to be quickly tackled when they surface under its zero-COVID policy. Economically vital cities, including the capital Beijing, are demanding more PCR tests for residents and locking down neighbourhoods and even districts in some cases.

The sharp rebound will test China’s ability to keep its COVID measures surgical and targeted, and could dampen investors’ hopes that the world’s second-largest economy could ease curbs and restrictions soon.

“We are seeing a game between rising voices for loosening controls and rapid spreading of COVID cases,” said Nie Wen, a Shanghai-based economist at Hwabao Trust.

Considering how the nationwide COVID curbs are crushing domestic consumption, Nie said he had downgraded his fourth-quarter economic growth forecast to around 3.5% from 4%-4.5%. The economy grew 3.9% in July-September.

The rising case load dragged on China’s stock markets on Tuesday, but shares have not yet surrendered last week’s big gains.

Investors see China’s beaten-down markets as an attractive prospect as a global slowdown looms, and have focused on small clues of gradual change – such as more targeted lockdowns and progress on vaccination rates.

“No matter how harsh the letter of the law is…there is a little bit more loosening,” said Damien Boey, chief macro strategist at Australian investment bank Barrenjoey.

NO FULL LOCKDOWN YET

Guangzhou, capital of Guangdong province, reported 2,377 new local cases for Nov. 7, up from 1,971 the previous day. It was a dramatic jump from double-digit increases two weeks ago.

Surging case numbers in the sprawling southern city, dubbed the “factory floor of the world”, means Guangzhou has surpassed the northern Inner Mongolia city of Hohhot to become China’s COVID epicentre, in its most serious outbreak ever.

Many of Guangzhou’s districts, including central Haizhu, have imposed varying levels of curbs and lockdowns. But, so far, the city has not imposed a blanket lockdown like the one in Shanghai earlier this year.

Shanghai, currently not facing a COVID resurgence, went into a lockdown in April and May after reporting several thousand new infections daily in the last week of March.

“We have been working from home for the past couple of days,” said Aaron Xu, who runs a company in Guangzhou.

“Only a few compounds have been locked up so far. Mostly we are seeing disruptions in the form of public transit services being suspended and compound security barring couriers and food delivery. And we have to do PCR tests every day.”

RISING CASES

In Beijing, authorities detected 64 new local infections, a small uptick relative to Guangzhou and Zhengzhou, but enough to spark a new burst of PCR tests for many of its residents and a lockdown of more buildings and neighbourhoods.

“The lockdown situation has continued to deteriorate quickly across the country over the past week, with our in-house China COVID lockdown index rising to 12.2% of China’s total GDP from 9.5% last Monday,” Nomura wrote in a note on Monday.

Zhengzhou, capital of central Henan province and a major production base for Apple (AAPL.O) supplier Foxconn (2317.TW), reported 733 new local cases for Nov. 7, more than doubling from a day earlier.

In the southwest metropolis of Chongqing, the city reported 281 new local cases, also more than doubling from 120 a day earlier.

In the coal-producing region of Inner Mongolia, the city of Hohhot reported 1,760 new local cases for Nov. 7, up from 1,013 a day earlier.

Reporting by Ryan Woo, Bernard Orr, Liz Lee and Jing Wang; Additional reporting by Josh Ye in Hong Kong and Tom Westbrook in Singapore; Editing by Raju Gopalakrishnan, Stephen Coates and Raissa Kasolowsky

Our Standards: The Thomson Reuters Trust Principles.

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Apple warns of lower iPhone shipments as COVID curbs hobble China plant

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  • Apple expects lower shipments of iPhone 14 Pro and Pro Max
  • Apple says a China plant operating at sharply reduced capacity
  • Apple supplier Foxconn revises down Q4 outlook

TAIPEI, Nov 7 (Reuters) – Apple Inc (AAPL.O) expects lower shipments of premium iPhone 14 models than previously anticipated following a significant production cut at a virus-blighted plant in China, dampening its sales outlook for the busy year-end holiday season.

Demand for high-end smartphones assembled at Foxconn’s (2317.TW) Zhengzhou plant has helped Apple remain a bright spot in a technology sector battered by consumer spending cutbacks amid surging inflation and interest rates.

But the Cupertino, California-based vendor has fallen victim to China’s zero-COVID-19 policy, which has seen global firms including Canada Goose Holdings Inc (GOOS.TO), and Estee Lauder Companies Inc (EL.N) shut local stores and cut forecasts.

“The facility is currently operating at significantly reduced capacity,” Apple said on Sunday without detailing the scale of the reduction.

“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated,” it said in a statement.

Reuters last month reported that iPhone output could slump as much as 30% in November at Foxconn’s Zhengzhou factory – one of the world’s biggest – due to COVID-19 restrictions.

The factory in central China, which employs about 200,000 people, has been rocked by discontent over stringent measures to curb the spread of COVID-19, with many workers fleeing the site.

Market researcher TrendForce last week cut its iPhone shipment forecast for October-December by 2 million to 3 million units, from 80 million, due to the factory’s troubles, adding its investigation found capacity utilisation rates around 70%.

Apple, which began selling its iPhone 14 range in September, said customers should expect longer waiting times.

“Anything that affects Apple’s production obviously affects their share price,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.

“But this is part of a much deeper story – the uncertainty surrounding the future of the Chinese economy… These headlines are part of the ongoing saga as to whether there is any truth to the consistent rumours that authorities are discussing whether some of the measures will be lifted in the first quarter.”

China on Monday reported its highest number of new COVID-19 infections in six months, with disruption to the world’s second-largest economy spreading nationwide since October. At the weekend, health officials said they would stick with strict coronavirus curbs, disappointing investors hoping for easing.

Meanwhile, Apple expects to produce at least 3 million fewer iPhone 14 handsets this year than planned due to weak demand for lower-end models, Bloomberg News reported on Monday, citing people familiar with the plan.

The world’s most valuable firm, with a market capitalisation of $2.2 trillion, last month forecast October-December revenue growth would slow from the previous quarter’s 8% – though market watchers regarded that favourably in a battered sector.

“Given that Apple reported only two weeks ago with positive guidance, we think this points to the potential for a longer and more severe lockdown,” Credit Suisse analysts said, expecting iPhone sales to be pushed to later quarters than lost.

They estimated Apple’s revenue to rise 3% in the current quarter, with iPhone sales growing 2% to $73 billion.

Reuters Graphics

FOXCONN CUTS OUTLOOK

Taiwan’s Foxconn is the world’s largest contract electronics manufacturer and Apple’s biggest iPhone maker, accounting for 70% of shipments globally. It has iPhone production sites in India and southern China, but its biggest is in the city of Zhengzhou in the eastern Chinese province of Henan.

Local officials recently commented on cases of COVID-19 at the plant. Foxconn has declined to disclose the number of infections or comment on the conditions of those infected.

On Monday, it said it was working to resume full production at Zhengzhou as soon as possible. A person familiar with the matter told Reuters that Foxconn’s target is by the second half of November.

At the request of the local government, Foxconn said it would implement measures to curb the spread of COVID-19, including restricting employee movement to between their dormitory and factory area.

The manufacturer has also began a recruitment drive, offering workers who left the plant during Oct. 10 to Nov. 5 a one-off bonus of 500 yuan ($69) if they returned. It also advertised salaries of 30 yuan an hour, higher than the 17 to 23 yuan base salaries that some workers told Reuters they received.

The Zhengzhou Airport Economy Zone, which houses the iPhone factory, entered a seven-day lockdown on Wednesday with measures included barring residents from going out and only allowing access to approved vehicles. read more

Foxconn said the provincial government “has made it clear that it will, as always, fully support Foxconn”.

“Foxconn is now working with the government in concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible.”

Having previously expressed “cautious optimism” in its fourth-quarter earnings guidance, Foxconn on Monday said it will “revise down” its outlook given events in Zhengzhou.

The fourth quarter is traditionally a hot season for Taiwanese technology companies as they race to supply smartphones, tablet computers and other electronics for the year-end holiday shopping period in Western markets.
Foxconn releases its third-quarter earnings results on Nov. 10.

The firm, formally Hon Hai Precision Industry Co Ltd, saw its share price fall 0.5% in Monday trade, versus a 1.5% rise in the benchmark index (.TWII).

($1 = 7.2135 Chinese yuan renminbi)

Reporting by Ben Blanchard and Sarah Wu in Taipei, Caroline Valetkevitch in New York and Jaiveer Shekhawat in Bengaluru; Additional reporting by Brenda Goh; Writing by Miyoung Kim; Editing by Daniel Wallis and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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