Stay on top of Monday’s top 5 market news By

Stay on top of Monday’s top 5 market news By

Updated: 21 days, 17 hours, 13 minutes, 53 seconds ago

© Reuters.

By Geoffrey Smith and Jessica Bahia Melo — Covid-19 wreaks havoc on the world’s largest iPhone manufacturing hub; forcing Apple (NASDAQ:) to warn about holiday season shipments. China’s exports fall for the first time in two and a half years as the war in Ukraine and the end of the pandemic hit demand in western markets.

Facebook, owned by Meta Platforms (NASDAQ:), is slated to lay off thousands of employees in an effort to restore profitability. Stocks are expected to add to their gains after Friday’s jobs report.

And there are problems in the cryptocurrency market as Binance targets rival FTX.

In Brazil, PEC of the transition and the alternatives sought by the elected government to fulfill social expenditures.

Here’s what you need to know about the financial markets on Monday, November 7th.

CHECK IT OUT: Economic Calendar

1. Apple warns of holiday shipments as Covid disrupts iPhone factory in China

Apple has confirmed it will ship fewer iPhones than expected in the main holiday quarter, due to a Covid-19 outbreak that has severely disrupted operations at FoxConn’s largest iPhone assembly plant in Zhengzhou. Reports from Zhengzhou described a chaotic scene, with thousands of workers quarantined or hastily relocated to other factories.

“We now expect lower … shipments than we previously anticipated and customers will have longer wait times to receive their new products,” the company warned in a weekend statement.

The news is a stark contrast to rumors of an imminent liberalization of China’s Covid-Zero policy, which continues to push local markets higher. Real-time data also points to a growing economic slowdown as key export markets in North America and Europe struggle with high inflation. fell in annual terms for the first time in more than two years in October, according to data released on Monday.

2. Meta intends to announce major layoffs

Meta Platforms, the owner of Facebook, is expected to join the list of big tech companies making big job cuts this week, The Wall Street Journal reported.

The layoffs will represent a landmark moment for the company, which has never slowed down in its entire (admittedly brief history). They represent CEO Mark Zuckerberg’s reaction to a sharp slowdown in revenue growth and an explosion in operating costs due to heavy and – so far – unproven investments in the so-called Metaverse.

The absolute number of layoffs could decrease in absolute terms compared to those seen on Twitter last week, given that Meta employs more than 10 times the workforce of Twitter. However, Zuckerberg is not expected to lay off half the workforce, as Elon Musk did last week. Several reports have suggested that Twitter will face legal action – especially outside the US – for what appears to have been a blatant violation of labor law in several jurisdictions.

Meta shares rose 2.82% premarket on hopes that the measures will restore its dwindling profit margins.

US stock markets are expected to open higher later, building on gains made in response to Friday’s labor market report. The report had added to the evidence of a slowdown in hiring and wage growth that analysts said had brought the end of the policy one step closer.

At 9:26 am, it rose 0.62%, while and advanced 0.61% and 0.61%. The three major cash ratios had risen between 1.2% and 1.4% on Friday.

Aside from Big Tech, stocks likely to be in focus later on include Walgreens Boots Alliance (NASDAQ:), which is moving past last week’s deal to draw a line under the opioid scandal with a deal to buy Summit Health for around $9 billion, including debt, according to the WSJ. Also in focus will be Fox (NASDAQ:) and UK-based betting group Flutter Entertainment (LON:) after an arbitration court ruled that Rupert Murdoch’s group would have to pay $4.1 billion to exercise its option on an 18.6% interest in its FanDuel unit.

CHECK: Real-time US stock quote on the pre-market

3. Government elected in Brazil wants to make transition PEC viable

After a period of rest after the elections, President-elect Luiz Inácio Lula da Silva (PT) begins to participate in the government transition process this week. Among the challenges, establishing and articulating a base in Congress, enabling social measures that were not foreseen in the Budget and choosing ministers for prominent areas, such as the Economy.

The expectation is to meet some names this Monday and others during the week. The transition team also sought out economists who helped formulate the Real Plan, such as André Lara Resende and Pérsio Arida, so that they could work on the process – Lara Resende has already accepted the invitation to join the team. Both became closer to Lula’s campaign after declaring their vote for PT. Economist Guilherme Mello, a professor at Unicamp, who helped formulate Lula’s government plan, is also part of the group.

Negotiations have already begun, with the forecast for the creation of a Proposal for Amendment to the Constitution (PEC) that authorizes expenses – according to some calculations of R$ 200 billion – outside the expenditure ceiling, with the maintenance of the Auxílio Brasil of R$ 600, a real increase of the minimum wage, among others. If the choice is not for the transition PEC, plan B would be opening a supplementary credit, with authorization from the Federal Audit Court (TCU). To follow the protocol, the choice must be made until Tuesday (15).

At 9:42 am, the ETF was down 1.71%.

CHECK: Listing of the main Brazilian assets

4. Binance withdraws liquidity from FTX

Cryptographic stress is back.

FTX’s native token dropped 15% over the weekend after Binance, its biggest rival and some-time supporter, said it will pull all of its remaining funds from the group, a process that Binance founder and CEO Changpeng Zhao said it will probably take several months.

Zhao said the move was not hostile, but he also said that “we will not support people who lobby other industry actors behind their backs.”

The move followed a report by Coindesk last week that hinted that Alameda Research, an FTX-affiliated hedge fund, had taken a massive long position in FTT to support its value starting in June. Alameda CEO Caroline Ellison and FTX owner Sam Bankman-Fried dismissed the report as misleading.

CHECK: Cryptocurrency quotation

5. Oil at the start of COP-27

Crude oil prices were operating lower after rising for most of the past week on hopes that China’s Covid-Zero policy would be relaxed.

At 9:27 am, futures were down 0.97% at USD 91.71 per barrel, while futures fell 0.81% to US97.77 per barrel.

The market appeared without problems at the COP-27 climate conference, which started with a scenario of a strong recovery in carbon dioxide emissions this year. The world economy has increasingly turned to coal to fill a supply gap left by the suspension of Russian gas shipments to Europe and by droughts that have severely hit hydropower production from China to France and Latin America.

CHECK: Quotation of the main global commodities

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