Revolt at Foxconn, HP layoffs, Russian oil price cap

© Reuters

By Geoffrey Smith — Violence erupts at the Zhengzhou iPhone assembly factory owned by Apple supplier Foxconn amid extreme conditions imposed by the latest COVID lockdown. HP announces layoffs as PC market slows further. There is a glimmer of hope in Europe as closely watched corporate surveys suggest that things have stopped getting worse in November. The G7 is ready to agree on a maximum price for Russian oil. And the weekly jobless claims numbers and Michigan consumer sentiment survey round out the data calendar before the US shuts down for the Thanksgiving holiday weekend. Here’s what you need to know about the financial markets on Wednesday November 23rd.

1. Violence breaks out in “iPhone City”

Violent protests at the world’s largest iPhone assembly plant, owned by Apple (NASDAQ:) supplier Foxconn (TW:) (also known as Hon Hai Precision).

The plant has already been placed under COVID-19 restrictions for a month, placing an intolerable burden on its thousands of employees, trapped between fears of contracting the disease in the workplace and losing their jobs if they refuse to comply with instructions. For the first time in recent history, reports also cited workers complaining of unpaid wages.

The report reads poorly in the rest of China’s manufacturing sector given Foxconn’s reputation as a relatively effective crisis manager during the pandemic and given the nationwide spread of COVID-19 cases in recent days.

The fell in response to concerns of similar developments elsewhere.

2. Dump data to the US before the holidays

The US releases weekly data a day earlier than usual due to the looming Thanksgiving holiday on Thursday.

Initial jobless claims are expected to have risen to 225,000 from 222,000 last week, although this is still a level that suggests those who lose their jobs are still finding new employment with relative ease.

There’s also order data for October at 08:30 AM ET (1:30 PM GMT), while November survey and numbers for October follow at 10:00 AM ET (3:00 PM GMT).

3. Shares should open mixed; HP higher after layoffs announcement

US stock markets are set to edge higher at the open but are not expected to make any major moves before the holiday weekend, with most participants focused on a quick getaway home.

As of 06:30 ET (11:30 GMT), they were up 26 points or 0.1%, while , and were up parallel.

Stocks likely to be the focus next include HP (NYSE:), which was marked up 1.4% in pre-market after the laptop and PC maker announced it was leaving its force. work over the next three years against the backdrop of a sustained decline in demand. Dell also reported a 17% drop in revenue from PC and laptop sales and said it expects things to get worse before they get better.

Other headlines in the news include John Deere (NYSE:), which reported a in its , and English soccer club Manchester United (NYSE:), after the Glazer family who own the chronically underperforming club said it would consider a potential sale. This came on the same day the club terminated Cristiano Ronaldo’s contract for giving a scathingly critical interview.

4. European PMIs stabilize in November

Is it a glimmer of light at the end of the tunnel for Europe? S&P’s Purchasing Managers Indices – a rough proxy for real-time changes in economic growth dynamics – in November in , and stopped worsening in

There was one activity in particular, the first since Russia invaded Ukraine in February, as companies reported a marked easing of supply chain bottlenecks.

In the UK, meanwhile, the return to orthodox fiscal policy appears to have galloping and sharply higher inflation, even as new orders to the private sector have fallen the most in more than a year, promising a grim winter.

In the Eurozone and the UK, PMIs still remain deep in what usually means contraction territory.

5. Oil crashes on China news, shrugs to Russia’s price cap; EIA inventories due

Crude oil prices fell again as news out of China revived concerns about the demand profile from the world’s largest importer. Recent polls have already suggested that the country’s refineries are exporting more due to their inability to sell products at home.

By 06:35 AM ET (11:35 GMT), prices were down 2.5% to $78.67 a barrel, while futures were down 3.1% to $85.64 a barrel.

The market continues to shrug off attempts by the G7 to set a price limit for Russian oil exports, a measure seen as largely unenforceable. The stigma attached to Russian crude means that Urals, its main export blend, is already trading at a $20 discount to Brent. Thus, reports of a limit of around $70 a barrel are unlikely to have any practical effect.

The US government releases at 10:30 AM ET (3:30 PM GMT) as usual.

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