Stock Market
In the Global stock markets, Wallstreet closed in the green on Friday reversing some of the earlier losses following a volatile trading week. Most concerns revolved around Chinese property giant Evergrande who missed the deadline to pay its $83.5 million in coupon payment on dollar bonds with a face value of $2.03 billion to global investors, the Wall Street Journal reported on Friday.
The company was due to make the interest rate payment by September 23 and was seen largely as a test of the real estate developer’s chance to avoid a default. However, the report noted that the bondholders didn’t receive any money and now a 30-day grace period is in effect, with Evergrande can still being able to deliver on its payments, after which bondholders can call a default.
Previously, it was reported that China was telling its state-owned businesses and local authorities to prepare for the potential collapse of Evergrande.
Investors are concerned that the collapse of one of the largest companies in China will pull down the entire global growth.
Crypto Markets
China last week announced all cryptocurrency-related activities illegal, including overseas crypto exchanges that extend their services to mainland China.
Major News
Apple, Tesla suppliers stop production over China’s energy policy
According to media reports, key suppliers for Apple Inc. and Tesla Inc. have stopped production at their facilities in order to better comply with the Chinese government’s tighter energy usage policies, causing further disruptions to the supply chain.
Eson Precision Engineering, a supplier of mechanical parts for the firms, on Sunday said that they will be shutting down production until Friday. At the same time, Apple’s circuit board maker and speaker component supplier both stated they will need to stop manufacturing parts until the end of the month.
Nikkei Asia reported that chip packaging and testing service providers supplying Intel, Nvidia, and Qualcomm have also gotten official notices from the government to suspend production for several days. Chinese officials began a crackdown on energy consumption in order to cut its carbon emissions and comes on the heels of rising coal and natural gas prices.
Global Chip Shortage
Consulting firm AlixPartners has released a revised forecast of expected damage to the auto industry from the semiconductor shortage on Thursday, practically doubling the amount of its May projection with losses predicted at $210 billion.
In terms of units produced, the forecast is now 7.7 million units lost in 2021 rather than the 3.9 million expected in May’s report.
Mark Wakefield of AlixPartners explained that “everyone had hoped that the chip crisis would have abated more by now, but unfortunate events such as the COVID-19 lockdowns in Malaysia and continued problems elsewhere have exacerbated things.”
Tesla CEO Elon Musk said on Friday that he expects the current global semiconductor shortage to be short-term. Musk added that more chip plants are being built so there should be additional production capacity available from 2022.
Daimler’s Mercedes buys 33% of battery maker ACC
Mercedes-Benz announced on Friday its purchase of a 33% stake in battery cell producer Automatic Cells Company (ACC). Daimler’s Mercedes will hold two out of six seats on the company’s supervisory board, along with founding owners Stellantis and TotalEnergies.
A statement on Daimler’s website declared that “joining ACC is the next step on the luxury car maker’s strategic course from ‘Electric first’ to ‘Electric only'” in line with its ambitions of going fully electric by the end of the decade.
Moderna CEO expects pandemic to end in 2022
Moderna’s Chief Executive Stephane Bancel estimated last week that the coronavirus pandemic could end as soon as next year once the global supplies of COVID-19 vaccines reach satisfying levels.
“If you look at the industry-wide expansion of production capacities over the past six months, enough doses should be available by the middle of next year so that everyone on this earth can be vaccinated. Boosters should also be possible to the extent required,” Bancel told Swiss paper Neue Zuercher Zeitung.
Nike Q1 Earnings
Nike Inc. announced on Thursday its earnings results for the first fiscal quarter of 2022, reporting a revenue increase of 16% to $12.2 billion. In the quarter ending August 31, Nike’s direct sales surged 28% to $4.7 billion, with diluted earnings per share jumping 22% to $1.16.
“Nike’s strong results this quarter are continued proof of our deep consumer connections, unrelenting innovation pipeline and a digital advantage that fuels our brand momentum. We have the right playbook to navigate macroeconomic dynamics, as we create value through our relentless drive to fuel the future of sport,” CEO John Donahoe noted in the report.
Facebook CTO Steps Down
Facebook Chief Technology Officer Mike Schroepfer has announced that he will be stepping down from his current post in order to move to another part of the company. Schroepfer will be replaced by the head of the tech giant’s hardware division, Andrew Bosworth, starting from next year.
READ; China Bans All Crypto Transactions, Declares Them Illegal
