By Nicholas Jasinski |
Monday, November 28
Unrest. U.S. investors'
attention was focused on the the other side of the Pacific today, after
protests against China's zero-Covid policy intensified over the weekend.
It's a rare show of dissent in the
authoritarian country. Commentators compared the upswell to the Tiananmen
Square protests of 1989.
Here's Tanner Brown
reporting for Barron's:
Masses of people gathered in
dozens of Chinese cities on Saturday and Sunday, initially protesting China’s
heavy-handed Covid-19 containment approach, but broadening into chants against
the Communist Party and even leader Xi Jinping.
Most worrying for authorities, the protests
ranged from hundreds of people marching and singing in China’s most
economically and politically sensitive metropolises such as Shanghai and
Beijing, to smaller cities all the way to the country’s remote west.
Meanwhile, China's confirmed Covid-19 cases
sit at a record high.
The combination of harsh lockdowns and
disruptive protests raise investors' concerns on two fronts: over consumer
demand and growth in the world's second-largest economy and over continued
supply-chain issues for goods producers.
Apple, which makes the bulk of
its devices in China, saw its stock drop 2.6% today. One
analyst estimated that protests near a factory in Zhengzhou,
China could shave 10% off of this quarter's planned iPhone production.
Less economic activity in China would mean
less demand for energy. The price of a barrel of oil slid 1.3% today, to
$77.24. That's only 1.5% above its lows of 2022, back in the first week of
January. It has been quite a round-trip for the oil price, which peaked at
nearly $124 in March.
The two major Chinese exchanges added to last
week's losses. The Shanghai Composite slipped 0.7%
today and the Hang Seng
index lost 1.6%.
In the U.S., major indexes opened with slim
losses, then declined through the session. The S&P 500
closed down 1.5%, the Dow Jones Industrial Average fell
1.4%, and the Nasdaq Composite
shed 1.6%.
The week's main event will be the jobs report
on Friday. Economists are forecasting growth of 200,000 jobs in November, a
deceleration from October's 261,000-strong pace of hiring.
That wouldn't be all bad news for the market,
if the implication is that the Federal Reserve can ease off its rate hike
trajectory. But a larger decline in job growth could also backfire, by
raising recession fears.
Over in the digital realm today, another
cryptocurrency-related firm has gone under in the wake of FTX's
collapse earlier this month. BlockFi, which once offered
enticingly high yields on cryptocurrency deposits, filed for bankruptcy
protection in its home state of New Jersey.
At its peak, BlockFi had more than $10 billion
worth of crypto deposits. Barron's Joe
Light has the full story here.
DJIA: -1.45% to 33,849.46
S&P 500: -1.54% to 3,963.94
Nasdaq: -1.58% to 11,049.50
The Hot Stock: Catalent +13.4%
The Biggest Loser: V.F. Corp -5.6%
Best Sector: Consumer Staples -0.4%
Worst Sector: Real Estate -2.8%
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