SEOUL (Reuters) – Samsung Electronics (005930.KS) said on Saturday that one coronavirus case had been confirmed at its mobile device factory complex in the southeastern city of Gumi, causing a shutdown of its entire facility there until Monday morning.
Samsung Electronics, the world’s top smartphone maker, said the floor where the infected employee worked would be shut down until the morning of Feb. 25.
“The company has placed colleagues who came in contact with the infected employee in self-quarantine and taken steps to have them tested for possible infection,” Samsung said in a news release.
Samsung’s factory in Gumi accounts for a small portion of its total smartphone production, and it makes high-end phones, mostly for the domestic market. Samsung produces most of its smartphones in Vietnam and India.
Gumi is close to the city of Daegu, home to a church at the center of South Korea’s largest coronavirus outbreak.
South Korea said on Saturday that the number of people infected with the coronavirus in the country had more than doubled to 433.
Samsung said production at its chip and display factories in other parts of South Korea would not be affected.
NEW YORK (Reuters) – The strong dollar got stronger on Thursday, rising to a three-year high against a basket of trading partner currencies, after a steep slide in the Japanese yen called into question its safe-haven status while the rally in U.S. equities took a pause.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., February 6, 2020. REUTERS/Lucas Jackson
Gold prices hit their highest level in seven years as investors sought safe-haven assets after a rise in the number of new coronavirus cases in South Korea and the price of oil rose, supported by China’s efforts to bolster its virus-weakened economy.
The dollar has surged almost 2% since Tuesday against the yen, reaching its highest in almost 10 months, and the greenback climbed to near three-year highs against the euro.
The dollar index of the world’s most-traded currencies rose 0.12% to its highest level since May 2017.
The index is up 3.6% this year. It also gained to its best levels of the year against China’s offshore yuan and MSCI’s index of emerging-market currencies.
A host of reasons were cited for the dollar’s move, ranging from the outperformance of the U.S. economy and corporate earnings to potential recessions in Japan and the euro zone.
A run of dire economic news out of Japan has stirred talk the country is already in recession and that Japanese funds were dumping local assets in favor of U.S. shares and gold.
“The strongest explanation (for the yen’s decline) is a widespread selling by Japanese asset managers amid growing fears about the health of Japan’s economy,” said Raffi Boyadijian, investment analyst at XM.
The yen’s slide is unusual because the exchange rate with the dollar has been unraveling from its close correlation to the price of gold and U.S. Treasury yields, a development that must be watched, he said.
“This raises question marks about whether the yen is losing some of its shine as the world’s preferred safe-haven currency,” Boyadijian said.
China reported a drop in new virus cases and announced an interest rate cut to buttress its economy. But South Korea recorded an increase in new cases, Japan reported two deaths and researchers said the pathogen seemed to spread more easily than previously believed.
A rally that had lifted major U.S. and European stock indexes to record highs this week lost steam, as investors fretted about the spread of the coronavirus outside of China.
MSCI’s gauge of stocks across the globe shed 0.84% and emerging market stocks lost 0.95%.
The pan-European STOXX 600 index lost 0.62%.
The Dow Jones Industrial Average fell 283.03 points, or 0.96%, to 29,065. The S&P 500 lost 30.99 points, or 0.92%, to 3,355.16 and the Nasdaq Composite dropped 131.33 points, or 1.34%, to 9,685.85.
Morgan Stanley’s multibillion-dollar buyout for E*Trade Financial boosted the discount brokerage’s shares.
E*Trade jumped 24.4% after Morgan Stanley offered to pay $13 billion in an all-stock deal, the biggest acquisition by a Wall Street bank since the financial crisis.
Morgan Stanley’s shares fell 3.6%.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.5% overnight, led by drops in Hong Kong’s Hang Seng and South Korea’s KOSPI.
Spot gold rose 0.3% to $1,616.74 an ounce, after hitting its highest since February 2013 at $1,622.19.
Oil prices rose further after a U.S. report showed a draw in gasoline inventories and a much smaller-than-anticipated rise in crude stocks.
U.S. gasoline stockpiles fell 2 million barrels in the week to Feb. 14. Analysts had estimated an increase of 400,000 barrels.
Data from the U.S. Energy Information Administration (EIA) showed that crude inventories rose only 414,000 barrels last week, compared with a 2.5 million-barrel rise that analysts had expected in a Reuters poll. [EIA/S]
Brent crude futures rose 58 cents to $59.70 a barrel and West Texas Intermediate gained 91 cents to $54.20 a barrel.
Demand for safe-haven U.S. Treasury debt was robust, driving the 30-year bond yield below the psychologically significant 2% level to its lowest since September 2019.
The 30-year bond last rose 39/32 in price to push its yield down to 1.9626%.
Benchmark 10-year notes last rose 17/32 in price to yield 1.5135%.
Reporting by Herbert Lash; additional reporting by Ritvik Carvalho in London; editing by Jonathan Oatis
(Reuters) – Apple Inc (AAPL.O) said on Monday it would not meet its revenue guidance for the March quarter because of the coronavirus outbreak slowing iPhone production and weakening demand in China.
FILE PHOTO: The Apple Inc. logo is seen hanging at the entrance to the Apple store on 5th Avenue in Manhattan, New York, U.S., October 16, 2019. REUTERS/Mike Segar/File Photo
Apple’s manufacturing facilities in China have begun to reopen, but they are ramping up more slowly than expected, the technology company said in a statement to its investors.
Global supplies of Apple’s iPhones will be limited as the sites work toward operating at full capacity, the company said.
“These iPhone supply shortages will temporarily affect revenues worldwide,” the company said.
In January, Apple forecast $63 billion to $67 billion in revenue for the second quarter ending in March, ahead of estimates of $62.4 billion.
The company said it would provide more information during its next earnings call in April.
Apple also said that store restrictions due to coronavirus precautions had affected its sales in China, with most retail stores either closed or operating at reduced hours.
“We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can,” the company said.
The disruptions follow a strong December quarter for iPhone sales, which were up for the first time in a year.
Analysts have estimated that the virus may slash demand for smartphones by half in the first quarter in China, the world’s biggest market for smartphones.
“While we have discussed a negative iPhone impact from the coronavirus over the past few weeks, the magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared,” Wedbush analyst Daniel Ives wrote in a note.
Apple’s stock is expected to face a knee-jerk reaction on Tuesday, when Wall Street reopens after the Presidents Day holiday, Ives said.
Wedbush said it remained optimistic that Apple would be able to recover from the coronavirus setback.
“While trying to gauge the impact of the iPhone miss and potential bounce back in the June quarter will be front and center for the Street, we remain bullish on Apple for the longer term,” Ives said.
The outbreak is expected to intensify pressure on China’s economy, with multiple companies struggling to restart production after an extended Chinese New Year holiday.
Fiat Chrysler, <FCHA.MI, Hyundai Motor Co (005380.KS) and General Motors Co (GM.N) have all said their auto production lines were, or could be, hit by Chinese factories that are slow to restart because of the virus.
Reporting by Neha Malara in Bengaluru and Laila Kearney in New York; Editing by Dan Grebler and Peter Cooney
LONDON (Reuters) – A drop in the number of new coronavirus cases and the Federal Reserve chairman’s optimistic view of the economy lifted world stocks for a third day on Wednesday and sparked a 2% rally in oil prices, on hopes the epidemic’s effects would be contained.
FILE PHOTO: An investor monitors share market prices in Kuala Lumpur, Malaysia, August 25, 2015. REUTERS/Olivia Harris.
China reported its lowest number of new coronavirus cases since late January, lending weight to a prediction from its senior medical adviser that the outbreak might be over by April. A continued decline in new cases would inflict would keep the epidemic from doing as much economic damage as initially feared,
Those reports encouraged investors to get back into equities at the expense of bonds, gold and the Japanese yen — safe-haven assets that benefited as the virus death toll mounted.
“The virus may retard the modest upturn in global trade and manufacturing output which we predict to unfold from the second quarter of 2020s. But it seems unlikely to derail it,” analysts at Berenberg told clients.
The damage to Western economies in particular “will likely be modest and mostly temporary,” the bank said.
MSCI’s global equity index rose 0.12% to stand just off Tuesday’s record highs .MIWD00000PUS. A pan-European equity index rose to a record as automobile stocks — which depend on exports to China — jumped 1.2% .SXAP.
Futures indicated Wall Street would extend gains from Tuesday, when the S&P 500 and Nasdaq posted record closing highs ESC1 [.N].
In Asia, mainland Chinese and Hong Kong shares rose almost 1% .CSI300. The offshore-traded yuan reached two-week highs CNH=D3. The Thai baht, Korean won and Taiwanese dollar, reliant on Chinese tourism and trade, gained 0.3% to 0.5% THB= KRW= TWD=. The yen slipped 0.3% JPY=EBS to a three-week low against the dollar.
Brent crude futures rose from 13-month lows, helped by the likelihood producers would cut output LCOc1. Brent is still down almost 20% from its peaks in early January.
Some noted it remained unclear whether the coronavirus had peaked. Some Chinese companies said they were laying off workers as supply chains for goods had ruptured.
“Evidence suggests the positive mood will continue, and we see some coordination in markets with oil rallying, base metals up and Treasuries coming under pressure,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. But “I am not ready to buy risk assets yet.”
U.S. RESILIENCE
Yields on U.S. Treasuries and German Bunds US10YT=RR rose 3 to 4 basis points. Ten-year U.S. yields are now 13 bps off the four-and-a-half-month lows hit late January though almost 30 bps below where they started 2020.
Yields had risen on Tuesday after U.S. Federal Reserve Chair Jerome Powell said the U.S. economy was “resilient”. Powell also said he was monitoring the coronavirus, because it could lead to disruptions that affect the global economy.
The dollar had risen to four-month highs against a basket of currencies .DXY but inched off those levels on Wednesday.
U.S. markets also got a boost from signs President Donald Trump might be re-elected in November, since centrist candidates for the Democratic nomination appear to be struggling .
“Trump had a great start into the U.S. election season. After the early end of the impeachment trial in the Senate and the Iowa caucus chaos for the Democrats, betting markets suggest that Trump has a 58% probability of winning re-election on 3 November,” Berenberg noted.
The day’s big currency mover was the New Zealand dollar NZD=D3, which rose 0.8% for its biggest daily gain since December, after the central bank dropped a reference to further rate cuts, suggesting its easing cycle might be over.
Additional reporting by Stanley White in Tokyo, editing by Larry King
(Reuters) – A U.S. district judge is expected to rule in favor of allowing Sprint and T-Mobile to merge over the objections of a group of state attorneys general, according to two sources familiar with the matter.
A smartphones with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration
Shares of Sprint surged 69% in after hours trade and T-Mobile stock rose 8%.
U.S. District Court Judge Victor Marrero is expected to make his decision public on Tuesday, one source said.
Approval of the deal would be a high profile defeat for state attorneys general, led by New York and California, who had argued that a merger of the No. 3 and No. 4 U.S. wireless carriers would lead to higher prices, especially for customers who use prepaid plans popular with people with poorer credit.
The deal has already been approved by federal regulators.
The companies had said the deal was needed to help them build out next generation of wireless, called 5G, and better compete with sector leaders Verizon Communications Inc and AT&T Inc.
Executives from the companies, including outspoken T-Mobile Chief Executive John Legere, testified during the trial that Sprint’s business was deteriorating and would not survive if it did not merge with T-Mobile.
The two companies are expected to start talks on renegotiating the terms of their $26.5 billion merger in the next few days, two sources said.
T-Mobile parent Deutsche Telekom is keen to cut the price of the deal, arguing that Sprint’s fortunes have deteriorated since they inked their agreement, the sources added.
However, Sprint, in which Japan’s Softbank Group has a major stake, is expected to argue that T-Mobile needs Sprint in order to grow its cashflow and to boost its capacity using its spectrum, according to the sources.
There is no certainty that there will be a renegotiated deal, the sources cautioned.
The Court did not immediately respond to a request for comment. Sprint and T-Mobile both declined to comment.
One merger opponent, Gigi Sohn, a former telecoms regulator now at Georgetown Law, tweeted her displeasure with reports of the decision. “If #antitrust law doesn’t even block a 4-3 merger like this, we need to start from scratch,” she tweeted, referring to the market shrinking to three from four competitors. “I’ll have more to say tomorrow after I read the judge’s decision (through my tears).”
While a group of states decided to fight the deal in court, the federal government approved it with conditions, a decision which remain in effect.
The U.S. Justice Department approved the deal in July after the carriers agreed to sell some assets to satellite provider Dish Network Corp, which would create its own cellular network to ensure that there would still be four competitors in the market. The Federal Communications Commission signed off on the deal in October. Dish shares rose 2% after hours.
The states maintained that Dish was ill-equipped to become a competitive fourth wireless carrier.
The Wall Street Journal earlier reported that the court was expected to approve the deal on Tuesday.
Reporting by Diane Bartz in Washington and Greg Roumeliotis in New York, David Shepardson in DC and Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber, Uttaresh.V and Lincoln Feast.
FILE PHOTO: The Mattel company logo is seen at the 114th North American International Toy Fair in New York City, U.S., February 21, 2017. REUTERS/Stephanie Keith/File Photo
(Reuters) – Mattel Inc (MAT.O) will close a factory in Canada after shutting down two plants in Asia, as the toymaker reduces its manufacturing footprint to cut costs, the Wall Street Journal said on Sunday.
The maker of Barbie dolls closed its manufacturing sites in China and Indonesia last year and will shut a facility in Canada sometime this year, the newspaper said.
The closure of the Mega Bloks factory in Montreal, Canada would affect about 580 workers, the journal reported, citing a company spokeswoman.
The manufacturing overhaul is said to be a part of Chief Executive Officer Ynon Kreiz’s plan to turn around and stabilize Mattel, which has struggled in recent years from weak sales, the newspaper added.
Mattel did not immediately respond to Reuters’ request for comment.
The El Segundo, California-based company is scheduled to report its earnings later in the week.
Reporting by Bhargav Acharya in Bengaluru; Editing by Lisa Shumaker
FILE PICTURE: Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China Jan. 7, 2020. REUTERS/Aly Song/File Photo
SHANGHAI (Reuters) – U.S. electric carmaker Tesla’s (TSLA.O) factory in China’s financial hub of Shanghai will resume production on Feb. 10 with assistance to help it cope with a spreading epidemic of coronavirus, a Shanghai government official said on Saturday.
Many factories across China shut in late January for the Lunar New Year holiday that was originally due to end on Jan. 30 but which was extended in a bid to contain the spread of the new flu-like virus that has killed more than 700 people.
Tesla warned on Jan. 30 that it would see a 1-1.5 week delay in the ramp-up of Shanghai-built Model 3 cars as a result of the epidemic, which has severely disrupted communications and supply chains across China.
Tesla Vice President Tao Lin said this week that production would restart on Feb. 10.
“In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible,” Shanghai municipal government spokesman Xu Wei said.
The $2 billion Shanghai factory is Tesla’s first outside the United States and was built with support from local authorities. It started production in October and began deliveries last month.
The Shanghai government also said on Saturday it would ask banks to extend loans with preferential rates to small companies and exempt firms in hard-hit sectors like hospitality from value-added tax, among other measures to prop up businesses during the epidemic.
Such assistance would also apply to foreign companies, it added.
Reporting by Brenda Goh and Samuel Shen; Editing by Kenneth Maxwell and Stephen Coates
KUALA LUMPUR (Reuters) – AirAsia Group (AIRA.KL) CEO Tony Fernandes and Chairman Kamarudin Meranun will step aside for at least two months while the airline and authorities investigate allegations Airbus paid a bribe of $50 million to win plane orders from the company.
FILE PHOTO: Founder of AirAsia X Tony Fernandes (R) listens to its chairman Kamarudin Meranun during the signing ceremony for the new Airbus A330-200s in Kuala Lumpur February 28, 2011. REUTERS/Bazuki Muhammad/File Photo
A committee comprising the non-executive members of AirAsia’s board will review the allegations and take any necessary action, Asia’s biggest budget airline said on Monday.
Fernandes, one of the aviation industry’s best known executives, and Kamarudin will remain advisers, however, “in view of the current difficult economic circumstances facing the airline industry”, the company added.
Senior company executive Tharumalingam Kanagalingam will be the acting CEO, with the changes effective immediately.
In a joint statement, Fernandes and Kamarudin denied any allegations of wrongdoing or misconduct as directors of AirAsia.
“We would not harm the very companies that we spent our entire lives building up to their present global status,” they said.
Shares of AirAsia and unit AirAsia X (AIRX.KL) fell on Monday after the allegations by Britain’s Serious Fraud Office (SFO) came to light on Friday. AirAsia stock fell as much as 11% to 1.27 ringgit, their lowest since May 2016, while AirAsia X dropped 12% to an all-time low of 11.5 Malaysian sen.
Malaysia’s anti-graft agency is also investigating the allegations. AirAsia has said it never made any purchase decisions that were premised on Airbus (AIR.PA) sponsorship, and that it would fully cooperate with the Malaysian Anti-Corruption Commission (MACC).
Malaysia’s Securities Commission said on Sunday it would also examine whether AirAsia broke securities laws.
The allegations were revealed as part of a record $4 billion settlement Airbus agreed with France, Britain and the United States. Prosecutors said the company had bribed public officials and hidden payments as part of a pattern of worldwide corruption.
“This agreement and the contents were arrived at without any reference to us; neither were any explanations sought from us,” Fernandes and Kamarudin said in their statement.
“This is in clear violation of fundamental legal principles of fairness.”
Airbus said at the weekend it would not comment on the Malaysian investigations.
The SFO’s allegations concern a 2012 sponsorship agreement between the now-defunct Caterham Formula 1 racing team, founded by Fernandes, and Airbus’s then-parent, EADS.
The SFO said on Friday that between October 2013 and January 2015, EADS paid $50 million to sponsor a sports team which was jointly owned by two people described as AirAsia Executive 1 and Executive 2. It said Airbus employees offered an additional $55 million, though no payment was made.
Fernandes bought Caterham together with Kamarudin in 2011.
FILE PHOTO: Lotus (later Caterham) Formula One team principal Tony Fernandes poses with Air Asia flight attendants before the Malaysian F1 Grand Prix at Sepang circuit outside Kuala Lumpur April 10, 2011. REUTERS/Tim Chong/File Photo
The SFO said Executives 1 and 2 were “key decision makers in AirAsia and AirAsia X, and were rewarded in respect of the order of 180 aircraft from Airbus”.
Analysts said the accusation against AirAsia comes at a particularly bad time as airlines grapple with a slowdown in business because of the fast-spreading coronavirus epidemic that has killed more than 300 people in China and disrupted air travel.
TA Securities downgraded AirAsia Group stock to “sell” from “buy”.
Reporting by Krishna N. Das; Editing by Christopher Cushing and Mark Potter
FILE PHOTO: A WeWork logo is seen at a WeWork office in San Francisco, California, U.S. September 30, 2019. REUTERS/Kate Munsch -/File Photo
(Reuters) – Softbank-backed office sharing firm WeWork plans to name real estate industry veteran Sandeep Mathrani as its new chief executive, according to people familiar with the matter.
Sebastian Gunningham and Artie Minson who are currently co-CEO’s of WeWork parent The We Company, will remain with the company at least through a transition period, the people said.
The news was reported earlier on Saturday by The Wall Street Journal.
Reporting by Aishwarya Nair in Bengaluru and Joshua Franklin in New York; Editing by Bill Berkrot
FILE PHOTO – A screen displaying an advertisement for iPhone 11 Pro is seen outside an Apple store in Beijing, China October 31, 2019. REUTERS/Florence Lo
(Reuters) – Apple Inc on Saturday said it would shut all of its official stores and corporate offices in mainland China until Feb 9. as fears over the coronavirus outbreak mounted and the death toll more than doubled to over 250 from a week ago.
“Out of an abundance of caution and based on the latest advice from leading health experts, we’re closing all our corporate offices, stores, and contact centers in mainland China through February 9,” Apple said in a statement. The company said looked forward to re-opening stores “as soon as possible”.
Earlier this week, Apple closed three stores in China due to concerns about the spread of the virus.
It’s joining a handful of overseas retailers, including Starbucks Corp and McDonald’s Corp to temporarily shut storefronts as a precautionary measure.
Many other companies, meanwhile, have called for employees in China to work from home and cease non-essential business travel in the first week of February.
Normally, businesses in China would be preparing to return to normal operations following the end of the week-long Lunar New Year Holiday.
Apple remains heavily reliant on China both for smartphone sales as well as for its supply chain and manufacturing. Many factories in Hubei province, including plants run by AB InBev and General Motors Co, have temporarily suspended production due to the virus.
In a recent earnings call, Apple CEO Tim Cook said the company was working out mitigation plans to deal with possible production loss from its suppliers in Wuhan. The city where the virus outbreak originated is home to several Apple suppliers.
Reporting by Akshay Balan in Bengaluru and Josh Horwitz in Shanghai; Editing by Shri Navaratnam and Lincoln Feast.
