The daily business briefing: October 24, 2022
Chinese stocks dive in Hong Kong after Xi tightens grip on power, Tesla cuts prices in China as demand weakens, and more
Chinese markets dive after Communist Party cements Xi's power
Stocks in Hong Kong plunged Monday in their worst day since the 2008 global financial crisis after China's ruling Communist Party solidified President Xi Jinping's grip on power. The Hang Seng China Enterprises Index of Chinese stocks listed in Hong Kong dropped 7.3 percent, its biggest plunge after any Communist Party congress. China's currency, the yuan, fell to a 14-year low. Xi stacked top leadership positions with loyalists, including backers of the "zero COVID" policy that seeks to prevent coronavirus infections with costly lockdowns. "The market is concerned that with so many Xi supporters elected, Xi's unfettered ability to enact policies that are not market-friendly is now cemented," Justin Tang, head of Asian research at United First Partners, told Bloomberg.
Tesla slashes prices in China as demand softens
Tesla is cutting prices for its Model 3 and Model Y electric cars by up to 9 percent in China, the world's largest auto market, according to price listings posted Monday on the EV maker's website. Tesla CEO Elon Musk said last week that the company would fall short of its delivery target this year as China and Europe go through "a recession of sorts." China Merchants Bank International (CMBI) said Tesla's price changes, reversing an upward trend, showed that weakening demand is a threat for EV manufacturers in China. "The price cuts underscore the possible price war which we have been emphasizing since August," said CMBI analyst Shi Ji.
Jury selection kicks off Trump company's tax fraud trial
Jury selection begins Monday in the Trump Organization's tax fraud trial in New York. Former President Donald Trump wasn't indicted, but he signed some of the checks at the center of the case, which is part of a web of legal problems he, his children, and their businesses face. Prosecutors accuse the Trump family's Manhattan-based real estate company of giving executives "off the books" compensation such as cars, apartments, and private-school tuition payments in lieu of pay raises to dodge payroll taxes, and changing property valuations to defraud the government and lenders. The Trump Organization's 75-year-old former chief financial officer, Allen Weisselberg, recently pleaded guilty to conspiracy in the alleged scheme. He has agreed to testify in the company's trial.
Stock futures fluctuate after last week's gains
U.S. stock futures rose early Monday, shaking off an overnight dip, coming off Wall Street's best week since June. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.3 percent at 6:45 a.m. ET. Nasdaq futures were up 0.1 percent. The Dow gained 2.5 percent on Friday to close a volatile week up 4.9 percent. The S&P 500 gained 2.4 percent on Friday to finish the week up 4.7 percent. The tech-heavy Nasdaq also surged Friday, and gained 5.2 percent on the week. The volatility came as corporate earnings reports were mixed, with bank stocks Goldman Sachs and JPMorgan Chase rising after strong results but Snap plunging by 28 percent after disappointing earnings.
'Black Adam' leads the domestic box office in weekend debut
The superhero adventure film Black Adam, starring Dwayne Johnson, led the weekend box office, bringing in $67 million in its domestic debut. The Warner Bros. comic book movie also piled up $73 million in international ticket sales, bringing its global total to $140 million. Johnson, in his first superhero role, plays a villain aiming to alter the "hierarchy of power" in the DC universe, Variety says. "As a spin-off, this is a strong opening," says David Gross, head of the movie consulting firm Franchise Entertainment Research. Its opening was similar to fellow DC movie Aquaman (2018), starring Jason Momoa. Black Adam is the sixth Warner Bros. film out of six to open at No. 1 this year.