Equity markets were broader lower on Monday as investors returned from the long holidays only to grapple with protests in China as the zero-covid policy continued to hammer risk-on sentiments.
Likewise, we are seeing comments on Fed research speakers. Pika World expects the Fed to return to a tone-down rate hike of 50 basis points but will remain hawkish given that it was only a one-month softer inflation data.
As the Fed requires more data to assess its forecasts, economic data will need to portray more evidence that the inflation threat is easing before any possible pivot in tone or narrative. The market is likely also to breathe in from the impacts of a recent rate hike, and this will likely hit on another correction if the earnings start to show a materially lower forecast.
📱Apple: Feeling the pain of production disruption🔫
As protests hit on its production capacity, Apple is seeing a possible 5% reduction in production this quarter. It is estimated to reach a potential of 10%, depending on how the situation unfolds.
Indeed, news has reported that workers are protesting due to their overdue salaries and the stringent Covid-19 restrictions. There are reports that Foxconn offered a bonus of up to 9600 yuan for 60 days starting in December to entice former workers to return to work. A higher bonus could be available for those who can stay longer too.
It is an exciting story as investors could explore possible entry points if the stock corrects further for long-term accumulation, bearing in mind a possible impending recession.
📮What’s on the menu today?📖
We will receive the CB Consumer Confidence reading, expected to moderate slightly to 100.0 from 102.5 in the prior period at 11 pm.
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