WASHINGTON, Jan 20 (Reuters) – Amazon.com Inc’s (AMZN.O) cloud services division said Friday it plans to invest another $35 billion by 2040 to expand data centers in Virginia.
Amazon Web Services (AWS) said the new investment will create 1,000 jobs. Virginia Republican Governor Glenn Youngkin said AWS will establish multiple data center campuses across Virginia.
In 2021, AWS said from 2011 to 2020 it had invested $35 billion in data centers located in northern Virginia and had 3,500 full time employees at its data centers in the state.
Pending approval by state lawmakers, Virginia is developing a new “Mega Data Center Incentive Program,” which would allow the company to receive up to a 15-year extension of Data Center Sales and Use tax exemptions on equipment and software.
AWS also will be eligible to receive a state grant of up to $140 million “for site and infrastructure improvements, workforce development, and other project-related costs.”
Amazon shares closed up 3.8% Friday.
Amazon in 2018 after a long contest announced northern Virginia would be home to its second headquarters known as “HQ2” and eventually employ more than 25,000 employees. As of April, Amazon said its headcount assigned to the site was around 5,000.
Youngkin has faced some criticism for withdrawing from a competition to attract a new Ford Motor (F.N) battery plant expected to be built with China’s Contemporary Amperex Technology Co Ltd (CATL) (300750.SZ), the world’s largest battery producer.
Youngkin defended his decision Friday, telling Bloomberg News that he looks “forward to bringing a great company there. It won’t be one that uses kind of a Trojan-horse relationship with the Chinese Communist Party in order to gain.”
A spokesperson for Youngkin has said that “while Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party.”
Ford declined to comment on Youngkin’s decision to withdraw.
In July, Ford said it plans to localize 40 GWh of battery capacity in North America starting in 2026. It also announced CATL would provide battery packs for Mustang Mach-E models for North America starting in 2023 and would discuss cooperation for batteries in Ford vehicles around the world.
“Our talks with CATL continue – and we have nothing new to announce on either front,” Ford said.
Michigan is also a candidate for the Ford battery plant, sources said, and a decision could be made in the coming weeks.
Reporting by David Shepardson and Akash Sriram in Bengaluru; Editing by Aurora Ellis and Himani Sarkar
Our Standards: The Thomson Reuters Trust Principles.
SAO PAULO, Jan 19 (Reuters) – A Rio de Janeiro court on Thursday accepted Brazilian retailer Americanas SA’s (AMER3.SA) bankruptcy protection request, days after the company disclosed nearly $4 billion in accounting inconsistencies that have sparked a legal feud with creditors and investors.
Americanas, a 93-year-old company with stores all over Brazil and a major e-commerce unit, said in a securities filing that it would restructure debts of about 43 billion reais ($8.2 billion).
Shares in the company plunged about 42.5% to 1.00 real following news of the filing, extending its year-to-date drop to around 90%.
The firm, backed by the billionaire trio that founded 3G Capital, said the move had come “despite the efforts and measures that the management has been taking in the past few days alongside its financial and legal advisers to protect the company from the effects” of the accounting scandal.
Investors had expected the decision, with some deeming it unavoidable, especially after lender BTG Pactual (BPAC3.SA) obtained on Wednesday a court decision overturning part of the firm’s protection from creditors.
Americanas is also facing seven different investigations launched by securities regulator CVM, as well as an arbitration process requesting compensation of 500 million reais to the firm and the trio that founded 3G Capital.
In a document filed with the court, law firms Basilio Advogados and Salomao Kaiuca Abrahao attributed the urgency in filing for bankruptcy to the creditors’ decision to seize the companies’ assets.
The retailer also mentioned a debt downgrade by ratings agencies, which prevented any new loans from being extended. S&P, Moody’s and Fitch all downgraded Americanas’ credit ratings following the accounting scandal.
Earlier, Americanas had said that its current cash position stood at only 800 million reais, down from a previously reported 7.8 billion.
Lucas Pogetti, a partner at M&A advisers RGS Partners, said a large part of Americanas’ previously disclosed cash position was linked to the prepayment of receivables or deposited with creditors.
“Naturally, when the banks became aware of the company’s real situation they began to adopt a more aggressive posture to protect themselves, consequently restricting access to resources,” Pogetti said.
In the filing, Americanas asks to exclude its fintech, Ame, from the bankruptcy protection, as it is regulated by the central bank, and for authorization to increase its capital.
Americanas’ stores are ubiquitous at Brazilian shopping malls. It e-commerce unit, which traded as a separate company before a recent restructuring, is one of the country’s top online retailers.
Chief executive Sergio Rial resigned last week, less than two weeks after taking the job, citing the discovery of “accounting inconsistencies” totaling 20 billion reais.
Rial, the former head of Banco Santander’s Brazilian arm (SANB3.SA), attributed the inconsistencies to differences in accounting for the financial cost of bank loans and debt with suppliers.
Chief financial officer Andre Covre, who had just joined Americanas as well, also left the firm, which has Brazilian billionaires Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles as reference shareholders.
Americanas said the reference shareholders intended to maintain the company’s liquidity at levels that allowed for a “good operation” of its stores, digital channel and other entities.
($1 = 5.2226 reais)
Reporting by Gabriel Araujo, Tatiana Bautzer and Peter Frontini in Sao Paulo and Carolina Pulice in Mexico City; Editing by Rosalba O’Brien and Bradley Perrett
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Jan 18 (Reuters) – Amazon.com Inc (AMZN.O) will cut some jobs in the United States, Canada and Costa Rica by the end of Wednesday as part of its plan to lay off 18,000 employees, the e-commerce giant said in a memo to staff seen by Reuters.
The layoffs are the latest in the U.S. technology sector, with companies cutting their bloated workforce and slashing costs to reverse pandemic-era excesses and prepare for a worsening global economy.
The company is terminating 2,300 employees in Seattle and Bellevue, according to an update on the Worker Adjustment and Retraining Notification (WARN) site. The U.S. labor law requires companies planning a mass layoff to inform employees 60 days before the closure.
Amazon.com Chief Executive Andy Jassy said earlier this month the cuts, about 6% of the company’s roughly 300,000 corporate employees, would mostly impact the e-commerce and human resources divisions. read more
Microsoft (MSFT.O) said earlier on Wednesday it would cut about 10,000 jobs and take a $1.2-billion charge. read more
Reporting by Tiyashi Datta, Eva Mathews and Maria Ponnezhath in Bengaluru; Editing by Krishna Chandra Eluri, Shinjini Ganguli, and Uttaresh.V
Our Standards: The Thomson Reuters Trust Principles.
Jan 17 (Reuters) – Microsoft Corp (MSFT.O) plans to cut thousands of jobs with some roles expected to be eliminated in human resources and engineering divisions, according to media reports on Tuesday.
The expected layoffs would be the latest in the U.S. technology sector, where companies including Amazon.com Inc (AMZN.O) and Meta Platforms Inc (META.O) have announced retrenchment exercises in response to slowing demand and a worsening global economic outlook.
Microsoft’s move could indicate that the tech sector may continue to shed jobs.
“From a big picture perspective, another pending round of layoffs at Microsoft suggests the environment is not improving, and likely continues to worsen,” Morningstar analyst Dan Romanoff said.
U.K broadcaster Sky News reported, citing sources, that Microsoft plans to cut about 5% of its workforce, or about 11,000 roles.
The company plans to cut jobs in a number of engineering divisions on Wednesday, Bloomberg News reported, according to a person familiar with the matter, while Insider reported that Microsoft could cut recruiting staff by as much as one-third.
The cuts will be significantly larger than other rounds in the past year, the Bloomberg report said.
Microsoft declined to comment on the reports.
The company had 221,000 full-time employees, including 122,000 in the United States and 99,000 internationally, as of June 30, according to filings.
Microsoft is under pressure to maintain growth rates at its cloud unit Azure, after several quarters of downturn in the personal computer market hurt Windows and devices sales.
It had said in July last year that a small number of roles had been eliminated. In October, news site Axios reported that Microsoft had laid off under 1,000 employees across several divisions.
Shares of Microsoft, which is set to report quarterly results on Jan. 24, were marginally higher in late afternoon trading.
Reporting by Yuvraj Malik in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila
Our Standards: The Thomson Reuters Trust Principles.
Peak of COVID wave seen lasting 2-3 months – epidemiologist
Elderly in rural areas particularly at risk
People mobility indicators tick up, but yet to fully recover
BEIJING, Jan 13 (Reuters) – The peak of China’s COVID-19 wave is expected to last two to three months, and will soon swell over the vast countryside where medical resources are relatively scarce, a top Chinese epidemiologist has said.
Infections are expected to surge in rural areas as hundreds of millions travel to their home towns for the Lunar New Year holidays, which officially start from Jan. 21, known before the pandemic as the world’s largest annual migration of people.
China last month abruptly abandoned the strict anti-virus regime of mass lockdowns that fuelled historic protests across the country in late November, and finally reopened its borders this past Sunday.
The abrupt dismantling of restrictions has unleashed the virus onto China’s 1.4 billion people, more than a third of whom live in regions where infections are already past their peak, according to state media.
But the worst of the outbreak was not yet over, warned Zeng Guang, the former chief epidemiologist at the Chinese Center for Disease Control and Prevention, according to a report published in local media outlet Caixin on Thursday.
“Our priority focus has been on the large cities. It is time to focus on rural areas,” Zeng was quoted as saying.
He said a large number of people in the countryside, where medical facilities are relatively poor, are being left behind, including the elderly, the sick and the disabled.
Authorities have said they were making efforts to improve supplies of antivirals across the country. Merck & Co’s (MRK.N) molnupiravir was made available in China from Friday.
The World Health Organization this week also warned of the risks stemming from holiday travelling.
The UN agency said China was heavily under-reporting deaths from COVID, although it is now providing more information on its outbreak.
“Since the outbreak of the epidemic, China has shared relevant information and data with the international community in an open, transparent and responsible manner,” foreign ministry official Wu Xi told reporters.
Health authorities have been reporting five or fewer deaths a day over the past month, numbers which are inconsistent with the long queues seen at funeral homes and the body bags seen coming out of crowded hospitals.
China has not reported COVID fatalities data since Monday. Officials said in December they planned to issue monthly, rather than daily updates, going forward.
Although international health experts have predicted at least 1 million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, one of the lowest death rates in the world.
DIPLOMATIC TENSIONS
Concerns over data transparency were among the factors that prompted more than a dozen countries to demand pre-departure COVID tests from travellers arriving from China.
Beijing, which had shut its borders from the rest of the world for three years and still demands all visitors get tested before their trip, objects to the curbs.
Wu said accusations by individual countries were “completely unreasonable, unscientific and unfounded.”
Tensions escalated this week with South Korea and Japan, with China retaliating by suspending short-term visas for their nationals. The two countries also limit flights, test travellers from China on arrival, and quarantine the positive ones.
Japan’s Chief Cabinet Secretary Hirokazu Matsuno said on Friday Tokyo will continue to demand transparency, labelling Beijing’s retaliation as extremely “regrettable.”
Parts of China were returning to normal life.
In the bigger cities in particular, residents are increasingly on the move, pointing to a gradual, though so far slow, rebound in consumption and economic activity.
An immigration official said on Friday 490,000 daily trips on average were made in and out of China since it reopened on Jan. 8, only 26% of the pre-pandemic levels.
Singapore-based Chu Wenhong was among those who finally got reunited with their parents for the first time in three years.
“They both got COVID, and are quite old. I feel quite lucky actually, as it wasn’t too serious for them, but their health is not very good,” she said.
CAUTION
While China’s reopening has given a boost to financial assets globally, policymakers around the world worry it may revive inflationary pressures.
However, December’s trade data released on Friday provided reasons to be cautious about China’s recovery pace.
Jin Chaofeng, whose company exports outdoor rattan furniture, said he has no expansion or hiring plans for 2023.
“With the lifting of COVID curbs, domestic demand is expected to improve but not exports,” he said.
Data next week is expected to show China’s economy grew just 2.8% in 2022, its second-slowest since 1976, the final year of Mao Zedong’s decade-long Cultural Revolution, according to a Reuters poll.
Some analysts say last year’s lockdowns will leave permanent scars on China, including by worsening its already bleak demographic outlook.
Growth is then seen rebounding to 4.9% this year, still well below the pre-pandemic trend.
Additional reporting by the Beijing and Shanghai newsrooms; Writing by Marius Zaharia; Editing by Raju Gopalakrishnan
Our Standards: The Thomson Reuters Trust Principles.
Virus spreading from cities to vulnerable villages
WHO says China response challenged by lack of data
China’s grand reopening marred by Japan, Korea spat
BEIJING, Jan 12 (Reuters) – People in China worried on Thursday about spreading COVID-19 to aged relatives as they planned returns to their home towns for holidays that the World Health Organization warns could inflame a raging outbreak.
The Lunar New Year holiday, which officially starts on Jan. 21, comes after China last month abandoned a strict anti-virus regime of mass lockdowns that prompted widespread frustration and boiled over into historic protests.
That abrupt U-turn unleashed COVID on a population of 1.4 billion which lacks natural immunity, having been shielded from the virus since it first erupted in late 2019, and includes many elderly who are not fully vaccinated.
The outbreak spreading from China’s mega-cities to rural areas with weaker medical resources is overwhelming some hospitals and crematoriums.
With scant official data from China, the WHO on Wednesday said it would be challenging to manage the virus over a holiday period considered the world’s largest annual migration of people.
Other warnings from top Chinese health experts for people to avoid aged relatives during the holidays shot to the most-read item on China’s Twitter-like Weibo on Thursday.
“This is a very pertinent suggestion, return to the home town … or put the health of the elderly first,” wrote one user. Another user said they did not dare visit their grandmother and would leave gifts for her on the doorstep.
“This is almost the New Year and I’m afraid that she will be lonely,” the user wrote.
More than two billion trips are expected across China over the broader Lunar New Year period, which started on Jan. 7 and runs for 40 days, according to the transport ministry. That is double last year’s trips and 70% of those seen in 2019 before the pandemic emerged in the central Chinese city of Wuhan.
“I will stay at home and avoid going to very crowded places,” said Chen, a 27-year-old documentary filmmaker in Beijing who plans to visit her home town in the eastern province of Zhejiang.
Chen said she would disinfect her hands before meeting elderly relatives, such as her grandmother, who has managed to avoid infection.
LACK OF DATA CRITICISED
The WHO and foreign governments have criticised China for not being forthright about the scale and severity of its outbreak, which has led several countries to impose restrictions on Chinese travellers.
China has been reporting five or fewer deaths a day over the past month, numbers that are inconsistent with the long queues seen at funeral homes. The country did not report COVID deaths data on Tuesday and Wednesday.
Liang Wannian, the head of a COVID expert panel under the national health authority, told reporters that deaths could only be accurately counted after the pandemic was over.
Although international health experts have predicted at least a million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, a fraction of what other countries have reported as they removed restrictions.
Looking beyond the death toll, investors are betting that China’s reopening will reinvigorate a $17 trillion economy suffering its lowest growth in nearly half a century.
That has lifted Asian stocks to a seven-month peak, strengthened China’s yuan currency against the U.S. dollar and bolstered global oil prices on hopes of fresh demand from the world’s top importer.
China’s growth is likely to rebound to 4.9% in 2023, according to a Reuters poll of economists released on Thursday. GDP likely grew just 2.8% in 2022 as lockdowns weighed on activity and confidence, according to the poll, braking sharply from 8.4% growth in 2021.
TRAVEL CHALLENGES
After three years of isolation from the outside world, China on Sunday dropped quarantine mandates for inbound visitors in a move expected to eventually also stimulate outbound travel.
But concerns about China’s outbreak has prompted more than a dozen countries to demand negative COVID test results from people arriving from China.
Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine.
In a deepening spat between the regional rivals, China has in turn stopped issuing short-term visas and suspended transit visa exemptions for South Korean and Japanese nationals.
Despite Beijing’s lifting of travel curbs, outbound flight bookings from China were at only 15% of pre-pandemic levels in the week after the country announced it would reopen its borders, travel data firm ForwardKeys said on Thursday.
Low airline capacity, high air fares, new pre-flight COVID-19 testing requirements by many countries and a backlog of passport and visa applications pose challenges as the industry looks to recovery, ForwardKeys Vice President Insights Olivier Ponti said in a statement.
Hong Kong Airlines on Thursday said it does not expect to return to capacity until mid-2024.
Reporting by Bernard Orr, Liz Lee, Eduardo Baptista and Jing Wang in Beijing; Writing by John Geddie; Editing by Lincoln Feast and Nick Macfie
Our Standards: The Thomson Reuters Trust Principles.
Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, flying in trainers from overseas, and contemplating ideas like buying roofing and electric repair shops just to hire their workers as firms try to overcome a labor shortage that threatens to derail President Joe Biden’s climate change agenda.
The Inflation Reduction Act, signed into law last year, provides for an estimated $370 billion in solar, wind and electric vehicle subsidies, according to the White House. Starting Jan. 1, American consumers can take advantage of those tax credits to upgrade home heating systems or put solar panels on their roofs. Those investments will create nearly 537,000 jobs a year for a decade, according to an analysis by BW Research commissioned by The Nature Conservancy.
Reuters Graphics Reuters Graphics
But with the U.S. unemployment rate at an historic low of 3.5%, companies say they fear they will struggle to fill those jobs, and that plans to transition away from fossil fuels could stall out. Despite layoff announcements and signs of a slowdown elsewhere in the economy, the labor market for clean energy jobs remains tight.
“It feels like a big risk for this expansion. Where are we going to find all the people?” said Abigail Ross Hopper, president of the Solar Energy Industries Association trade group.
The shortage is anticipated to hit especially hard in electric vehicle and battery production and solar panel and home efficiency installations, forcing some of the companies into bold new approaches to find workers.
Korea’s SK Innovation Co Ltd, which makes batteries for Ford Motor Co’s (F.N) F-150 Lightning all-electric pickup truck in Commerce, Georgia, has pumped up pay and benefits as it ramps up its U.S. workforce to 20,000 people by 2025 from 4,000 today.
The battery maker is advertising pay between $20 and $34 an hour, above Georgia’s median hourly wage of $18.43, according to the U.S. Bureau of Labor Statistics. It is also covering 100% life insurance costs and matching retirement plan contributions up to 6.5%, above the national average of 5.6%, according to the Plan Sponsor Council of America. And the company is providing free food on the job.
“Georgia’s talent pool is not really massive. But we are trying to improve some of our policies to better source and retain workers,” said an SK official who declined to be named, citing the sensitivity of the matter.
Georgia state officials said SK’s hiring has been a success considering how quickly production had to ramp up to meet the company’s obligations to automakers.
While national residential solar installer SunPower Corp (SPWR.O) is recruiting aggressively, Chief Executive Peter Faricy said the company is also looking at what he called “crazy ideas” to secure labor – including buying up companies just for their workers.
“I’m not suggesting we will do this, but I want to give you an order of magnitude of what we’re considering. Like, should we acquire a roofing company and make them all solar installers? Do we go buy an electrical company and acquire 100 electricians?” he said.
SunPower also held talks within the last year with panel manufacturer First Solar Inc (FSLR.O) about developing a solar panel that would be easier to install, enabling crews to outfit two homes a day instead of just one, Faricy said.
SunPower’s competitor, Sunrun Inc (RUN.O), is deploying drones to survey roofs ahead of installation, reducing the number of workers required to scale roofs. It is also rewarding top crews with office parties.
“As best you can game-ify the experience for the employee… it just makes the industry more fun, more attractive,” Chris McClellan, Sunrun’s senior vice president of operations, said in an interview.
Offshore wind developer Orsted (ORSTED.CO), a Danish company that is planning to build projects off the East Coast, hopes to fly in employees from projects in the United Kingdom and Asia to help train staff. State reports have indicated that New York and Massachusetts face large offshore wind workforce gaps.
“We’re creating sort of an ecosystem where we don’t just have an offshore wind academy, but really train the trainers of the future,” said Mads Nipper, Orsted’s CEO, told Reuters.
The Biden Administration has repeatedly promised that new green energy jobs would be well-paying union jobs.
But many of those jobs have lagged the fossil fuel industry in pay, according to a 2021 study by BW Research, as clean energy companies have sought to contain costs to compete with entrenched industries. The IRA seeks to address that by tying prevailing wage and apprenticeship requirements to the subsidies.
Those provisions — and the hiring challenges — have put pressure on some employers to use unionized labor.
Learning from its earlier hiring challenges in Europe and Asia, Orsted signed an agreement with North America’s Building Trades Unions to secure workers.
Even Amazon.com Inc (AMZN.O), a company that has been embroiled in disputes with workers trying to organize, has used union labor to build the electric charging infrastructure for its fleet of electric delivery vehicles in Maspeth, Queens, NY.
Amazon did not respond to requests for comment.
Corrine Case, an electrician represented by the International Brotherhood of Electrical Workers, said she was paid $43 an hour to install the charging system at Amazon.
A single mother, Case said she was excited about the job security offered by the rising demand for electricians to install charging stations.
“Our field is constantly changing because of new energy sources and to be a part of that is amazing,” she said.
FREE WORKER TRAINING
In their hunt for workers, solar, wind and electric vehicle companies have expanded programs offering free and subsidized training to military veterans, women and the formerly incarcerated.
SK told Reuters that it has been recruiting at military job fairs and American Legion chapters and collaborating with programs like the Georgia National Guard’s Work for Warriors and the Manufacturing Institute’s Heroes MAKE America.
Some solar companies have tried to recruit veterans, saying the skills learned in military life translate well to the industry.
Utility scale solar developer SOLV Energy, SunPower and Nextracker last year teamed up with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women attended the week-long course in Colorado.
In October, the nonprofit Solar Hands-On Instructional Network of Excellence (SHINE) teamed up with the Virginia Department of Corrections on a pilot program to train 30 prison inmates and recently incarcerated people in solar panel installation. SHINE’s director David Peterson said the group is discussing expanding the program.
In California, the nonprofit Grid Alternatives has trained 150 inmates at the Madera County jail in solar installation since 2017 and is expanding its program this year to other facilities in the state. Potential employers are more open to hiring the formerly incarcerated once they see they have received some training, Tom Esqueda, the nonprofit’s outreach manager, said.
In Los Angeles, nonprofit Homeboy Industries, which works to rehabilitate former gang members, is using the potential job opportunities for solar panel installers to help recruits for its state-funded jobs program. Homeboy trains 50-60 people a year as solar panel installers.
More than 80% of the people who have gone through the training in the last year have found jobs in solar, according to Jackie Harper, who oversees the program.
“I’m going to be sticking with this,” said Marco Reyes, 28, who went through the program after his release from prison in February and earns $23 an hour as an installer in Valencia, California.
He now plans to train in the electrical end of solar installation, which would bump up his pay.
“Everyone has a chance to move up the ladder into a better position,” he said. “This job to me is a life changer.”
Read more:
Korea’s Hanwha Qcells to invest $2.5 bln in U.S. solar supply chain
U.S. solar installations to fall 23% this year due to China goods ban -report
Reporting by Nichola Groom and Valerie Volcovici; Edited by Richard Valdmanis and Suzanne Goldenberg
Our Standards: The Thomson Reuters Trust Principles.
New curbs for S.Korea, Japan nationals transiting China
China says visa suspensions for S.Korea, Japan “reasonable”
Escalating diplomatic spat may complicate economic relations
Social media users lash out at S.Korea’s “insulting” COVID curbs
BEIJING, Jan 11 (Reuters) – China introduced transit curbs for South Korean and Japanese nationals on Wednesday, in an escalating diplomatic spat over COVID-19 curbs that is marring the grand re-opening of the world’s second-largest economy after three years of isolation.
China removed quarantine mandates for inbound travellers on Sunday, one of the last vestiges of the world’s strictest regime of COVID restrictions, which Beijing abruptly began dismantling in early December after historic protests.
But worries over the scale and impact of the outbreak in China, where the virus is spreading unchecked, have prompted more than a dozen countries to demand negative COVID test results from people arriving from China.
Among them, South Korea and Japan have also limited flights and require tests on arrival, with passengers showing up as positive being sent to quarantine. In South Korea, quarantine is at the traveller’s own cost.
In response, the Chinese embassies in Seoul and Tokyo said on Tuesday they had suspended issuing short-term visas for travellers to China, with the foreign ministry slamming the testing requirements as “discriminatory.”
That prompted an official protest from Japan to China, while South Korean foreign minister Park Jin said that Seoul’s decision was based on scientific evidence, not discriminatory and that China’s countermeasures were “deeply regrettable.”
In a sign of escalating tensions on Wednesday, China’s immigration authority suspended its transit visa exemptions for South Koreans and Japanese.
The spat may affect economic relations between the three neighbours as well.
Japanese department store operator Isetan Mitsukoshi Holdings Ltd (3099.T) and supermarket operator Aeon Co (8267.T) said they may have to rethink personnel transfers to China depending on how long the suspension lasts.
“We won’t be able to make short-term business trips, but such trips had dwindled during COVID anyway, so we don’t expect an immediate impact. But if the situation lasts long, there will be an effect,” said a South Korean chip industry source who declined to be identified, as the person was not authorised to speak to media.
China requires negative test results from visitors from all countries.
COUNTING DEATHS
Some of the governments that announced curbs on travellers from China cited concerns over Beijing’s data transparency.
The World Health Organization has said China was underreporting deaths.
China’s health authorities have been reporting five or fewer deaths a day over the past month, numbers that are inconsistent with the long queues seen at funeral homes. In a first, they did not report COVID fatalities data on Tuesday.
China’s Center for Disease Control and Prevention and the National Health Commission did not immediately respond to requests for comment.
Without mentioning whether daily reporting had been discontinued, Liang Wannian, head of a COVID expert panel under the national health authority, told reporters deaths can only be accurately counted after the pandemic is over.
China should ultimately determine death figures by looking at excess mortality, Wang Guiqiang, the head of the infectious diseases department at Peking University First Hospital said at the same news conference.
Although international health experts have predicted at least one million COVID-related deaths this year, China has reported just over 5,000 since the pandemic began, a fraction of what other countries have reported as they reopened.
China says it has been transparent with its data.
State media said the COVID wave was already past its peak in the provinces of Henan, Jiangsu, Zhejiang, Guangdong, Sichuan and Hainan, as well as in the large cities of Beijing and Chongqing – home to more than 500 million people combined.
‘INSULTING’
On Wednesday, Chinese state media devoted extensive coverage of what they called as “discriminatory” border rules in South Korea and Japan.
Nationalist tabloid Global Times defended Beijing’s retaliation as a “direct and reasonable response to protect its own legitimate interests, particularly after some countries are continuing hyping up China’s epidemic situation by putting travel restrictions for political manipulation.”
Chinese social media anger mainly targeted South Korea, whose border measures are the strictest among the countries that announced new rules.
Videos circulating online showed special lanes coordinated by soldiers in uniform for arrivals from China at the airport, with travellers given yellow lanyards with QR codes for processing test results.
One user of China’s Twitter-like Weibo said singling out Chinese travellers was “insulting” and akin to “people treated as criminals and paraded on the streets.”
Annual spending by Chinese tourists abroad reached $250 billion before the pandemic, with South Korea and Japan among the top shopping destinations.
Repeated lockdowns have hammered China’s $17 trillion economy. The World Bank estimated its 2022 growth slumped to 2.7%, its second-slowest pace since the mid-1970s after 2020.
It predicted a rebound to 4.3% for 2023, but that is 0.9 percentage points below its June forecast because of the severity of COVID disruptions and weakening external demand.
($1 = 6.7666 Chinese yuan renminbi)
Additional reporting by Beijing Newsroom; Kaori Kaneko, Mari Shiraki and Elaine Lies in Tokyo; Joyce Lee, Hyunsu Yim and Heekyong Yang in Seoul
Writing by Marius Zaharia; Editing by Gerry Doyle and Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
Indexes: Dow up 0.6%, S&P 500 up 0.7%, Nasdaq up 1%
NEW YORK, Jan 10 (Reuters) – U.S. stocks ended solidly higher on Tuesday, led by a 1% gain in the Nasdaq, on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy.
In his first public appearance of the year, Powell said at a forum sponsored by the Swedish central bank that the Fed’s independence is essential for it to battle inflation.
Recent comments by other Fed officials have supported the view that the central bank needs to remain aggressive in raising interest rates to control inflation. Fed Governor Michelle Bowman said on Tuesday the bank will have to raise interest rates further to combat high inflation.
“Everybody hangs on every word from the Fed,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. Powell “didn’t really say anything” about policy, he added.
Investors anxiously awaited the U.S. consumer prices index report Thursday, which is expected to show some moderation in year-on-year prices in December.
Traders are betting on a 25-basis point rate hike at the Fed’s upcoming policy meeting in February.
“There are some indications that inflation is slowing significantly. What investors are really looking for is a gap down in major inflation data that could probably get the Fed’s attention,” Ghriskey said.
Amazon.com Inc. (AMZN.O) shares rose 2.9% and gave the Nasdaq and S&P 500 their biggest boosts.
The Dow Jones Industrial Average (.DJI) rose 186.45 points, or 0.56%, to 33,704.1; the S&P 500 (.SPX) gained 27.16 points, or 0.70%, at 3,919.25; and the Nasdaq Composite (.IXIC) added 106.98 points, or 1.01%, at 10,742.63.
Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023. REUTERS/Andrew Kelly
Shares of Microsoft Corp (MSFT.O) rose 0.8%, a day after Semafor, citing people familiar with the matter, reported that the tech company was in talks to invest $10 billion in ChatGPT-owner OpenAI.
Communications services (.SPLRCL) was the day’s best-performing sector, while energy (.SPNY) rose along with oil prices.
This week marks the start of the fourth-quarter earnings season for S&P 500 companies, with results from several of Wall Street’s biggest banks due later this week.
Shares of investment bank Jefferies Financial Group (JEF.N) rose 3.8% on Tuesday, a day after it posted its second-best year for investment banking revenue. It also reported a 52.5% slump in fourth-quarter profit.
Analysts expect overall S&P 500 earnings to have declined 2.2% in the fourth quarter from a year ago, according to IBES data from Refinitiv, as worries about rising rates and the economy mounted.
Some investors are hoping for signs that the Fed may soon take a break after raising the federal funds rate seven times in 2022.
The World Bank on Tuesday slashed its 2023 growth forecasts on Tuesday to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies.
Volume on U.S. exchanges was 10.02 billion shares, compared with the 10.91 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered decliners on the NYSE by a 2.33-to-1 ratio; on Nasdaq, a 2.45-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and no new lows; the Nasdaq Composite recorded 71 new highs and 30 new lows.
Additional reporting by Ankika Biswas, Amruta Khandekar and Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli, Shounak Dasgupta and Richard Chang
Our Standards: The Thomson Reuters Trust Principles.
Macy’s, Lululemon drop on holiday-quarter warnings
Indexes: Dow down 0.3%, S&P 500 down 0.1%, Nasdaq up 0.6%
NEW YORK, Jan 9 (Reuters) – The S&P 500 index (.SPX) erased early gains to close nearly flat on Monday as expectations that the Federal Reserve will become less aggressive with its interest rate hikes were offset by lingering worries about inflation.
The Dow ended lower, and the Nasdaq Composite (.IXIC) ended well off the day’s highs.
Investors are awaiting comments Tuesday from Fed Chair Jerome Powell, who some strategists expect could say more time is needed to show inflation is under control.
Money market bets were showing 77% odds of a 25-basis point hike in the Fed’s February policy meeting.
A consumer prices report due Thursday could be key for rate expectations, said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina. “The CPI report this week is going to be essential for fine-tuning the Fed funds futures market.”
Investors also may have sold some shares after recent strong market gains, said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “You’re seeing a little bit of profit-taking ahead of the CPI number due out this week.”
The technology sector (.SPLRCT) gained as Treasury yields fell. Consumer discretionary stocks (.SPLRCD) also rose, with Amazon.com Inc (AMZN.O) up 1.5% after Jefferies said it saw cost pressures easing for the e-commerce giant in the second half of the year.
Also, S&P 500 companies are about to kick off the fourth-quarter earnings period, with results from top U.S. banks expected later this week.
Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023. REUTERS/Andrew Kelly
The Dow Jones Industrial Average (.DJI) fell 112.96 points, or 0.34%, to 33,517.65, the S&P 500 (.SPX) lost 2.99 points, or 0.08%, to 3,892.09 and the Nasdaq Composite (.IXIC) added 66.36 points, or 0.63%, to 10,635.65.
Shares of Broadcom Inc (AVGO.O) fell in late trading to end down 2% after Bloomberg, citing people familiar with the matter, reported that Apple Inc (AAPL.O) plans to drop a Broadcom chip in 2025 and use an in-house design instead.
Friday’s jobs report, which showed a moderation in wage increases, lifted hopes that the Fed might become less aggressive in its rate-hike push to reduce inflation.
Tesla Inc (TSLA.O) shares rose 5.9% after the electric-vehicle maker indicated longer waiting times for some versions of the Model Y in China, signaling the recent price cuts could be stoking demand.
Macy’s Inc (M.N) fell 7.7% and Lululemon Athletica Inc (LULU.O) dropped 9.3% after both retailers issued disappointing holiday-quarter forecasts.
Volume on U.S. exchanges was 11.35 billion shares, compared with the 10.90 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered decliners on the NYSE by a 1.85-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and two new lows; the Nasdaq Composite recorded 129 new highs and 32 new lows.
Additional reporting by Shubham Batra, Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Shounak Dasgupta and Richard Chang
Our Standards: The Thomson Reuters Trust Principles.