Wed, April 24, 2024 at 9:35 AM EDT
Business
China to inject $174 billion of liquidity on Feb. 3
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The first death from the coronavirus outside of China was reported on Sunday and the Beijing government took steps to shore up an economy hit by travel curbs and business shut-downs because of the epidemic.
A 44-year-old Chinese man from the city of Wuhan in Hubei province, the epicentre of the epidemic, travelled to the Philippines and died there on Saturday, the Philippines’ Department of Health said.
The vice governor of China’s Hubei province, Xiao Juhua, said the virus outbreak was still “severe and complicated”.
A total of 304 people have died in China, the National Health Commission said on Sunday. Infections in China jumped to 14,380 as of Saturday, it said.
At least another 171 cases have been reported in more than two dozen other countries and regions, including the United States, Japan, Thailand, Hong Kong and Britain.
Beijing is facing mounting isolation as countries introduce travel restrictions, airlines suspend flights and governments evacuate their citizens, risking worsening a slowdown in the world’s second-largest economy.
China’s central bank said it would inject a hefty 1.2 trillion yuan ($173.8 billion) worth of liquidity into the markets via reverse repo operations on Monday as the country prepares to reopen its stock markets after an extended Lunar New Year holiday.
The government also said it would help firms that produce vital goods resume work as soon as possible, state broadcaster CCTV reported, citing a meeting chaired by Chinese Premier Li Keqiang.
Hong Kong Financial Secretary Paul Chan said the risk of further contraction in the region’s economy, which was buffeted by anti-government protests last year, has increased due to the epidemic.
Catering, retail, tourism and consumer sectors, which have been hit in the last six months, would “fall into a deeper winter”, Chan said.
In Beijing, some malls stayed open during the extended holiday but staff wearing surgical masks stood outside shops offering to take customers’ temperatures. Many other stores and cafes in the capital and other cities chose to close.
“We can’t work and have no income. I would rather work than stay at home and do nothing,” said 32-year-old restaurant worker Wu Caixia in Beijing.
Some meal deliveries in Shanghai and Beijing have started to arrive with a note showing the temperatures of the workers that prepared, packaged and delivered the food – to reassure customers they are not sick – according to residents and social media postings.
China Evergrande Group, the nation’s third-largest property developer, said in an internal note it would extend its Lunar New Year holiday to Feb. 16, and suspend construction work at all of its 1,246 sites until Feb. 20.
OPEC and non-OPEC’s Joint Technical Committee (JTC) has scheduled a meeting over Tuesday and Wednesday in Vienna to assess the impact of the virus on oil demand, OPEC+ sources told Reuters.
TRAVEL BANS, EVACUATIONS
Authorities have effectively quarantined Wuhan, sealing off roads and shutting down public transport.
The city – where the virus is thought to have emerged late last year in a market illegally trading wildlife – was about to open two new hospitals for virus patients, state broadcaster CCTV and Xinhua news agency reported. One of the facilities was built in eight days.
The virus has disrupted a string of sporting events across China. Organisers of the all-electric Formula E series said on Sunday they had abandoned plans for a race in the city of Sanya next month.
The Chinese data on the numbers of infections and deaths suggests the new coronavirus is less deadly than the 2002-03 outbreak of Severe Acute Respiratory Syndrome (SARS), which killed nearly 800 people of the some 8,000 it infected, although such numbers can evolve rapidly.
The World Health Organization has declared the outbreak a public health emergency of international concern, but said global trade and travel restrictions are not needed.
However, a string of countries have ramped up border controls. Singapore and the United States announced measures on Friday to ban foreign nationals who have recently been to China from entering their territories, and Australia followed suit on Saturday.
Russia will start evacuating Russian citizens on Monday and Tuesday, Interfax and TASS news agencies reported.
The Philippines expanded its travel ban to include all foreigners coming from China, widening an earlier restriction that covered only those from Hubei province. Indonesia also barred visitors who have been in China for 14 days.
More than 100 Germans and family members landed in Frankfurt on Saturday after being evacuated from Wuhan. Two of them had the virus, adding to the eight cases in Germany already in quarantine.
About 250 Indonesians were also evacuated from Hubei.
Japan plans to send another chartered plane mid-week or later to bring back Japanese nationals who are still in Hubei, its foreign ministry said on Sunday.
Japan has barred foreigners who have been in Hubei from entering the country. South Korea will impose a similar entry ban from Tuesday, Prime Minister Chung Sye-kyun said.
In Washington, national security adviser Robert O’Brien said the United States has offered to send U.S. medical and other health professionals but Beijing had not yet accepted.
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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