Live Market Updates: China’s COVID-19 lockdowns roil stocks, BlockFi’s bankrupt, Musk trolls Apple

ECONOMY

Business groups urge Congress to take 'immediate' action to avert rail strike

More than 400 business groups are calling on Congress to take "immediate" steps to avoid a potential nationwide rail strike from damaging the economy.

President Joe Biden is expected to call on Congress to intervene to avert a potential rail strike that could happen as early as Dec. 9, a source briefed on the matter told Reuters.

On Monday, more than 400 groups called on Congress to intervene in the ongoing railroad labor standoff that threatens to idle shipments of food and fuel and strand rail travelers while inflicting billions of dollars of economic damage.

White House Press Secretary Karine Jean-Pierre declined to comment on Biden's plans but reiterated that a "shutdown is unacceptable because of the impact it would have on jobs and families and farms and businesses and communities... The president is directly involved in the process."

Labor Secretary Marty Walsh, Transportation Secretary Pete Buttigieg and Agriculture Secretary Tom Vilsack have been involved in discussions with the rail industry, unions and agriculture industry stakeholders, Jean-Pierre said.

MARKETS

Walt Disney CEO Iger meets with employees, hiring freeze stays in effect

Disney CEO Bob Iger on Monday held his first meeting with employees following his return to the top role at the entertainment giant and told them that the company's hiring freeze will remain in effect.

Walt Disney CEO Bob Iger says the hiring freeze at the media and entertainment company will continue.

Iger also said not to expect any headline making mergers and acquisitions. 

Representations of cryptocurrencies in front of FTX logo in this illustration taken Nov. 10, 2022. (Reuters/Dado Ruvic/Illustration)

FTX Trading Ltd., and approximately 101 additional affiliated companies, announced that most FTX subsidiaries around the world are resuming ordinary course payment of salary and benefits to employees worldwide and ordinary course payments to certain non-U.S. contractors and service providers.

The relief includes cash payments with respect to both pre-petition and post-petition periods, subject to limits for payment of pre-petition amounts established by the orders of the Bankruptcy Court. The FTX group will pay vendors and service providers in the ordinary course for all goods and services provided on or after the Chapter 11 filing date.

Express announced two transactions in support of a comprehensive plan to refinance its capital structure and expand its liquidity access while concurrently reducing interest rate exposure and providing flexibility to pay down its outstanding term debt balance.

The fashion apparel retailer:

• Increased the maximum revolver amount by $40 million to $290 million by amending its current $250 million senior secured asset-based revolving credit facility.

• Refinanced and reduced fixed debt exposure by amending its current $140 million senior secured asset-based term loan credit facility, including refinancing its $90 million first-in-last-out term loan and terminating its $50 million delayed draw term loan, of which $43 million was previously paid down.

Twitter logo and a photo of Elon Musk are displayed through magnifier in this illustration taken Oct. 27, 2022. (Reuters/Dado Ruvic)

LIFESTYLE

Musk says Apple stopped Twitter ads, threatens to 'withhold' it from app store

Elon Musk said Monday that tech giant Apple has "mostly" stopped advertising on Twitter. He also said Apple threatened to "withhold" Twitter from the app store.

Elon Musk accused Apple Inc of threatening to block Twitter Inc from its app store without saying why in a series of tweets on Monday that also said the iPhone maker had stopped advertising on the social media platform.

The billionaire CEO of Twitter and Tesla said Apple was pressuring Twitter over content moderation demands.

The action, unconfirmed by Apple, would not be unusual as the company has routinely enforced its rules and previously removed apps such as Gab and Parler.

Parler, which is popular with U.S. conservatives, was restored by Apple in 2021 after the app updated its content and moderation practices, the companies said at the time. "Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?," Musk, who took Twitter private for $44 billion last month, said in a tweet.

He later tagged Apple Chief Executive Officer Tim Cook's Twitter account in another tweet, asking "what's going on here?"

Apple did not immediately respond to requests for comment.

Traders work on the floor at the New York Stock Exchange in New York, Mon., Nov. 28, 2022. (AP Photo/Seth Wenig)

MARKETS

Stock market not factoring in potential recession, Goldman Sachs warns

Goldman Sachs analysts are projecting further recession scares in the stock market next year, citing a 39% probability of a growth slowdown in the U.S.

Investors may see “recession scares” next year because the stock market has not factored in a potential recession, warns Goldman Sachs.

The investment bank said there is a 39% probability of a growth slowdown in the U.S. over the next 12 months. Despite that, risk assets are only reflecting an 11% chance.

Azek is lower in extended trading. The designer and manufacturer of low maintenance and environmentally sustainable outdoor living products missed Wall Street profit expectations but topped revenue forecasts.

Net sales for the three months ended September 30 decreased 12.0% to $304.6 million; the estimate was $288.411 million.

The fiscal fourth quarter net loss was $4.8 million compared to net profit of $38.6 million.

Adjusted diluted earnings per share was 16 cents. The estimate was 17 cents.

For full-year fiscal 2023, Azek is assuming new construction and repair and remodel market declines and as a result, an approximately 10% year over year decline in volume.

Logo of Chinese e-commerce platform Pinduoduo Inc. next to a mobile phone, in this illustration taken March 22, 2022. (Reuters/Florence Lo/Illustration)

Chinese e-commerce platform Pinduoduo Inc beat Wall Street estimates for third-quarter revenue on Monday, helped by COVID-related lockdowns in the country that forced consumers to shop online.

Intermittent lockdowns and a recovery in consumer spending helped Pinduoduo and other Chinese online retailers gain business in the July-September quarter.

Pinduoduo said its revenue jumped 65% to 35.50 billion yuan ($4.99 billion) in the quarter ended Sept. 30, surpassing estimates of 30.94 billion yuan, according to Refinitiv data.

Agricultural produce, consumer electronics and beauty products were among categories that performed well, Pinduoduo Chairman and Chief Executive Chen Lei told analysts on a call following the earnings announcement.

Yahoo logo in front of a building in Rolle, Switzerland, Dec. 12, 2012. (Reuters/Denis Balibouse)

Yahoo Inc will buy nearly 25% of Taboola.com Ltd and become its largest shareholder in a deal allowing the online advertising company to exhibit paid content on the web portal's many sites.

The 30-year contract, announced on Monday, marks a big bet by internet pioneer Yahoo on digital advertising at a time when industry giants from Alphabet-owned Google to Meta Platforms Inc are struggling with an inflation-driven downturn in ad spending.

The Yahoo-Taboola partnership is expected to generate $1 billion in annual revenue, but the companies did not provide any other financial details. Yahoo will also get a seat on Taboola's board.

Yahoo, owned by private equity firm Apollo Global Management since a $5 billion buyout last year, has over the years been overtaken by Google and Facebook, but it still has nearly 900 million monthly active users thanks to a collection of sites such as Yahoo Finance, Yahoo Sports and TechCrunch.

The deal will hand Taboola exclusive rights to sell native ads on Yahoo's sites.

Ken Feinberg (Photo: Associated Press)

MARKETS

FTX bankruptcy unique, losses hard to determine: Ken Feinberg

Bankrupt FTX is on the hook for billions it owes to creditors. Longtime compensation recovery attorney Ken Feinberg says this case is anything but straightforward.

The special master of the 9/11 Victims Compensation Fund says the bankruptcy of FTXC is a “unique case,” with valuation more difficult to determine because it’s a cryptocurrency entity headquartered in the Bahamas.

Feinberg, who also oversaw compensation funds for the victims of the Boston Bombings, said any potential fund for FTX would be a "ways down the road" if needed.

ECONOMY

Stagflation to plague global economy in 2023, keeping stocks on edge

Stagflation is the consensus view for the global economy and stock market in 2023, according to a majority of fund managers surveyed by Bank of America.

Fund managers see stagflation as the biggest risk to the global economy in 2023, continuing to create volatility in the stock market, according to Bank of America researchers.

A recent pulse survey found that 92% of fund managers expect a period of high inflation and low economic growth next year, while 0% are forecasting a Goldilocks scenario, in which the economy avoids a recession and inflation slows.

Hain Celestial has named Wendy Davidson as President and Chief Executive Officer, effective January 1, 2023.

Current CEO Mark Schiller will continue to serve as President and Chief Executive Officer until December 31, 2022, at which point, he will become a non-executive director on the Board and will serve as an ongoing resource to Ms. Davidson.

Ms. Davidson is a seasoned consumer packaged goods executive with deep expertise in sales and marketing. She most recently served as President of the Americas for Glanbia Performance Nutrition, where she delivered strong results in a post-pandemic recovery while integrating several acquired brands into a single operating model.

Hain Celestial’s brands include Celestial Seasonings, Garden of Eatin’ and Joya.

People walk in front of Casino Lisboa in Macau, China, Dec. 21, 2019. (Reuters/Jason Lee)

Wynn Macau led a rally in Macau gaming stocks on Monday after the city's government said all six incumbent casino operators would be given new licenses to operate in the world's biggest gambling hub from January.

Shares in Wynn Macau jumped as much as 18.8% to HK$5.18, their highest since Oct. 10, and were on course for their biggest daily gain since October 2011.

The highly anticipated announcement on licenses signals stability and continuity for the Macau operators, which have invested more than $50 billion in the Chinese special administrative region in the past 20 years.

Frontier Airlines A321neo (Photo: Michael Oster/Frontier Airlines)

LIFESTYLE

Frontier Airlines ends customer service phone line support

Low-cost carrier Frontier Airlines dropped its customer service phone line in the middle of the busy holiday season as it fully transitions to digital communications.

Frontier Airlines is cutting the cord on its customer service phone line.

Customer service is now digital to ensure "customers get the information they need as expeditiously and efficiently as possible," a Frontier spokesperson told FOX Business.

Bins with merchandises during Cyber Monday at the Amazon fulfilment center in Robbinsville Township, N.J. Nov. 28, 2022. (Reuters/Eduardo Munoz)

LIFESTYLE

Cyber Monday projected to break holiday spending records

Cyber Monday spending is expected to break an all-time record with consumers projected to spend between $11.2 billion and $11.6 billion. Black Friday sales also set a new record.

Cyber Monday shopping may set a record. Adobe Digital Insights predicts total spending will reach between $11.2 billion and $11.6 billion.

The forecast tops Black Friday spending, which also set a new record this year, and surpasses the $10.7 billion consumers spent last Cyber Monday, according to the latest Adobe Analytics figures.

In the U.K., the volume of payments was up 5.0% compared to the same point in 2021, data from Barclaycard Payments showed.

Reuters contributed to this report.

In this photo provided Nov 23, 2022, security personnel in protective clothing take away a person during protest at the factory compound operated by Foxconn Technology Group (AP Photo)

TECHNOLOGY

Apple production shortfalls at China plant expected to result in loss of 6 million iPhone Pros

Turmoil at Apple's Zhengzhou, China, manufacturing plant is likely to result in a production shortfall of about 6 million iPhone 14 Pro and Pro Max devices.

Apple may be facing an iPhone shortage following turmult at its manufacturing plant in Zhengzhou, China. Lockdowns and worker unrest are expected to result in production being short nearly 6 million iPhone Pro devices.

The facility of supplier Foxconn produces most iPhone 14 Pro and Pro Max devices, in-demand units that have picked up the lack of demand for the regular iPhone 14. Apple cut its overall production target to about 87 million units from an earlier projection of 90 million units, according to Bloomberg.

MARKETS

Cryptolender BlockFi follows FTX into bankruptcy

Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection in New Jersey in the wake of the bankruptcy of Sam Bankman Fried's Bahamas-based FTX.

BlockFi Inc. and eight affiliates filed for bankruptcy protection in New Jersey to stabilize its business and provide the company with the opportunity to consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders.

To ensure a smooth transition into Chapter 11, BlockFi is filing with the court a series of customary motions to allow the cryptocurrency lender to continue to operate its business.

POLITICS

FTX founder Sam Bankman-Fried on hot seat as Senate inquiries, criminal probes move forward

Criminal and political investigations into FTX founder and former CEO Sam Bankman-Fried are set to heat up in the coming weeks as federal authorities seek to bring him to U.S. soil.

Lawmakers are piling onto the FTX fallout with the first of several hearings to begin this week.

Bitcoin, Ethereum and Dogecoin were all lower early Monday morning. (Getty Images)

Cryptocurrency prices edged lower early Monday with Bitcoin, Ethereum and Dogecoin all showing losses.

t approximately 5 a.m. ET, Bitcoin was trading at nearly $16,210 (-1.41%), or lower by $233.

For the week, Bitcoin was trading higher by 1.09%.

For the month, the cryptocurrency was lower by nearly 19%.

Ethereum was trading at approximately $1,171 (-1.98%), or lower by more than $23.4.

For the week, Ethereum was trading higher by nearly 4.64%.

For the month, it was trading lower by approximately 21.31%.

Dogecoin was trading at $0.095437 (-3.71%), or lower by approximately $0.003672. 

For the week, Dogecoin was higher by more than 28.4%. For the month, the crypto was higher by nearly 28%.

Gasoline and diesel prices both fell overnight nationwide. (gasprices.aaa.com)

The nationwide price for a gallon of gasoline slipped Monday to $3.546. On Sunday, the price was $3.555, according to AAA. The average price of a gallon of gasoline on Saturday was $3.566.

One week ago, a gallon of gasoline cost $3.662. A month ago, that same gallon of gasoline cost $3.716. A year ago, a gallon of gasoline nationwide cost $3.394.

Gas hit an all-time high of $5.016 on June 14, approximately 25 weeks ago.

Diesel declined early Monday nationwide as well, slipping to $5.215. On Sunday, the price was $5.228, according to AAA. 

One week ago, a gallon of diesel cost $5.298. A month ago, that same gallon of gasoline cost $5.308. A year ago, a gallon of gasoline cost $3.641.

US stocks were lower early Monday morning after a Black Friday-shortened session to close out last week. (Associated Press)

U.S. stock futures were lower early Monday morning after a mixed, shortened session on Wall Street Friday.

On Friday, when markets closed at 1 p.m. Eastern following the Thanksgiving day holiday on Thursday, the S&P 500 fell less than 0.1% to close at 4,026.12. 

Nearly 70% of stocks in the benchmark index gained ground, but the broader market was dragged lower by technology companies, whose high valuations give them more heft in pushing the market higher or lower. 

The Dow Jones Industrial Average rose 0.5% to 34,347.03. The Nasdaq fell 0.5% to 11,226.36. Long-term bond yields were relatively stable but still hovered around multi-decade highs.

The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.70% from 3.69% late Wednesday. Investors remain concerned about whether the Federal Reserve can tame the hottest inflation in decades by raising interest rates without going too far and causing a recession. 

The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing. 

Wall Street gets several big economic updates this week. The Conference Board business group will release its November report on consumer confidence and the U.S. government will release its closely watched monthly employment report. 

Meanwhile, shares skidded in Asia on Monday, with Hong Kong briefly dipping more than 4% following weekend protests in various cities over China’s strict zero-COVID lockdowns. 

The unrest in China is the boldest show of public dissent against the ruling Communist Party in years. It followed complaints that policies aimed at eradicating the coronavirus by isolating every case might have worsened the death toll in an apartment fire in Urumqi in the northwestern Xinjiang region. 

China’s infection rate has been lower than in the United States and other countries, but the authorities are facing rising resentment over the economic and human costs of the approach known as “zero-COVID" as businesses close and families are isolated for weeks with limited access to food and medicine.

“For investors, when it comes to China, trying to predict with any degree the reopening certainty that has no certainty, basis, or track record to go by is looking like a dangerous game in the context of the disquietening protests and the colossal challenge China’s leaders now have on their hands," Stephen Innes of SPI Asset Management said in a commentary. 

Hong Kong's Hang Seng fell 2.1% to 17,211.76 and the Shanghai Composite index lost 1.3% to 3,061.69. 

On Friday, China's central bank sought to boost the economy by easing its reserve requirement ratio, the proportion of assets banks must hold in reserve, by a quarter percentage point to 7.8%. 

“The cuts are a bid to support weakening economic growth dragged down not only by COVID restrictions but also a deeper property market rout," Mizuho Bank noted in a report. However, it said, that news was overshadowed by rising numbers of virus cases and the protests.

Oil prices slumped early Monday morning after Chinese protests in Shanghai over COVID zero policies. (Getty Images)

Oil prices slumped on Monday as street protests against strict COVID-19 curbs in China, the world's biggest crude importer stoked concern about the outlook for fuel demand. 

Brent crude dropped $2.43, or 2.9%, to trade at $81.20 a barrel at 0731 GMT, after diving more than 3% to $80.61 earlier in the session - its lowest since Jan. 4. 

U.S. West Texas Intermediate (WTI) crude slid $2.16, or 2.8%, to $74.12 a barrel. It fell as far as $73.60 earlier, its lowest since Dec. 22, 2021. 

Both benchmarks, which hit 10-month lows last week, have posted three consecutive weekly declines. Brent ended the latest week down 4.6%, while WTI fell 4.7%. 

"On top of growing concerns about weaker fuel demand in China due to a surge in COVID-19 cases, political uncertainty, caused by rare protests over the government's stringent COVID restrictions in Shanghai, prompted selling," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. 

WTI's trading range is expected to fall to $70-$75, he said, adding the market could stay volatile depending on the outcome of an upcoming OPEC+ meeting on output and the level of the forthcoming G7 price cap on Russian oil. 

China has stuck with President Xi Jinping's zero-COVID policy even as much of the world has lifted most restrictions. 

Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China's strict COVID restrictions flared for a third day and spread to several cities in the wake of a deadly fire in the country's far west. 

"Bearish sentiment is growing in the oil market with mounting concerns over demand in China and a lack of clear signs from oil producers to further cut output," said Tetsu Emori, CEO of Emori Fund Management Inc. "Unless OPEC+ agrees on a further reduction of production quota or the United States moves to reload its strategic petroleum reserves, oil prices may be headed further down," he said. 

The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, known as OPEC+, will meet on Dec. 4. 

In October, OPEC+ agreed to reduce its output target by 2 million barrels per day through 2023. read more The next OPEC+ meeting will take into account the condition and balance of the market, Iraq's state news agency quoted Saadoun Mohsen, a senior official at the country's state oil marketer SOMO, as saying on Saturday.

Investors also focused on Western plans for a price cap on Russian oil. Group of Seven (G7) and European Union diplomats have been discussing a price cap on Russian oil of between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow's military offensive in Ukraine without disrupting global oil markets. Russia calls its actions in Ukraine "a special operation."