China’s Street Protests Either Alarmed or Fretted Global Investors

Stocks slid and oil tumbled on the news of growing civil unrest in China. The yen outperformed while the yuan fell. S&P 500 futures dropped 0.8% the time of writing as modest customer traffic and heavy discounting by American retailers on Black Friday added to the downbeat tone. All eyes will be on the U.S. jobs report this week and on Jerome Powell and New York Fed President John Williams, who are among central bank officials scheduled to speak.

The euro reached a 5-month high compared to the dollar earlier today, briefly trading above $1.049. The Eurozone currency fell as low as $0.95 in late October, amid rising inflation and interest rate hikes. Earlier today, Klaus Knot of the European Central Bank tempered fears of recession, stating that while growth in the euro area will be “weak, maybe negative” it is needed to curb inflation. The euro rose 0.29% against the dollar to sell for 1.04390 at 3:30 p.m. CET.

Corporatewise, shares of Apple (AAPL) fell about 2% this European afternoon as growing unrest at a key Chinese plant, Apple’s key manufacturing hub of Zhengzhou, fanned worries of a bigger hit to the already constrained production of higher-end iPhone 14 models. On Friday the Foxconn (2317.TW)-operated plant, which is the world's biggest iPhone factory, could see a further drop in November shipments due to worker unrest and rising Covid-19 cases in the country. The turmoil may hurt companies, with disruption likely to result in a production shortfall of close to 6 million iPhone Pro units this year.

Meanwhile, gold prices soared to more than one-week high on Monday, buoyed by a weaker U.S. dollar and ahead of U.S. Federal Reserve Chairman Jerome Powell's speech later this week that could shed light on the updated monetary policy outlook. As of 3:30 p.m. CET, spot gold was flat at $1,749.70 per ounce, after hitting its highest since Nov. 18 earlier in the session. U.S. gold futures edged 0.1% higher to $1,755 per ounce.

Meanwhile, the week will be featured by several prominent economic data reports, including the Eurozone and German CPI readings, alongside the euro area consumer confidence index. Meanwhile, at the time of writing, the German DAX declined 1.14%, as Brenntag (BRN.DE) plummeted 7.07%. The French CAC 40 lost 1.02% concurrently, with Airbus (AIR.PA) plummeting 5.04%. The British FTSE 100 dipped 0.44%, as Persimmon (PSN.L) slid 3.54%.

Chinese stocks and the yuan dropped earlier this morning as protests erupted against China’s Zero-Covid policy. The tumultuous unrest has sparked uncertainty by complicating the nation’s path to reopening. Goldman Sachs (GS) speculated that China may end Zero-Covid prematurely. Meanwhile, according to data from the National Bureau of Statistics published on Sunday, Chinese industry companies with annual revenue of a minimum of 20 million yuan ($2.8 million) have seen their profits fall by 3% in the first 10 months of 2022 on an annual basis.

Japan’s Nikkei ended the session lower by 0.42%. In mainland China, the Shanghai Composite declined to end the day lower by 0.75%, while the Shenzhen Composite having plunged 0.69%. Concurrently, Hong Kong's Hang Seng nosedived 1.57%, while South Korea's Kospi Composite gave up 1.21% at the close.