An early lesson from this earnings season: Don't judge the quarter too quickly
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
12 minutes ago
- CNBC
U.S. firms scramble to secure rare-earth magnets — imports from China surge 660%
China's exports of rare-earth magnets to the United States in June surged more than seven times from the prior month, as American firms clamor to get hold of the critical elements following a preliminary Sino-U.S. trade deal. In April, Beijing placed restrictions on several critical magnets, used in advanced tech such as electric vehicles, wind turbines and MRI machines, requiring firms to receive licenses for export. The move was seen as retaliation against U.S. President Donald Trump's steep tariffs on China. Beijing has a stranglehold on the production of rare-earth magnets, with an estimated 90% of the market, as well as a similar hold on the refining of rare-earth elements, which are used to make magnets. The U.S. received about 353 metric tons of rare-earth permanent magnets in June, up 660% from the previous month, data released by the General Administration of Customs showed, though the exports were about half that from June last year. The U.S. was the second-largest destination for China's rare-earth magnets, behind Germany, as it relies heavily on their imports for its large manufacturing sector, particularly in automotive, electronics, and renewable energy. In total, China exported 3,188 metric tons of rare earth permanent magnets globally last month, up nearly 160% from May, but 38% lower compared with the same period last year. The growth in exports came after Washington and Beijing agreed last month on a trade framework that included easing controls on Chinese rare-earth exports as well as a rollback of some American tech restrictions for shipments to China. AI behemoth Nvidia said last week it was planning to resume shipments of its H20 AI chips to China, after the exports were restricted in April. Last month, controls on American AI chip software companies' business in China had also been rolled back. Chinese rare-earth magnet producers started announcing the approval of export licenses last month. If exports continue to increase, it will be of great benefit to companies that have been suffering from shortages of magnets due to the lengthy time required to secure export licenses. For example, several European auto-parts suppliers were forced to halt production in recent months. The magnet shortages had also hit emerging industries such as humanoid robotics. In April, Elon Musk said production of Tesla's Optimus humanoid robots had been disrupted. China's controls on its rare-earths sector have prompted some global governments to reexamine their rare-earth supply chains and search for ways to support domestic mining of the minerals. However, experts say that setting up alternatives to China's rare-earth magnet supply chain could take years, as it requires an intricate process of rare-earth element refining and separation. "The separation process is quite complex, and China has a lot of advantages in this after putting in decades of research into the processes," Yue Wang, a senior consultant of rare earths at Wood Mackenzie, told CNBC last month. One way that the U.S. has been trying to compensate for lack of rare-earth magnets is through increased recycling. Apple and miner MP Materials announced a $500 million deal last week for the development of a recycling facility that will reinforce the iPhone maker's U.S. magnet supply chain. Peter Alexander from financial consultancy Z-ben Advisors said that Washington's latest concessions on tech restrictions were a reflection of just how much leverage China has in its trade relationship with the United States, speaking on CNBC's "China Connection" on Monday.
32 minutes ago
Chinese investors snap up stocks on hopes for an end to price wars and overcapacity
BEIJING -- China's stock market is buzzing over government promises to tackle price wars that have hurt profits and worsened global trade tensions. The prevailing catchphrase is 'anti-involution,' and it reflects efforts to curb intense competition and overcapacity in industries like solar panels, steel, and electric vehicles. With rising trade barriers such as President Donald Trump's higher tariffs, and relatively weak domestic demand, manufacturers have been slashing prices, undermining their bottom lines and driving some out of business. The producer price index, which measures the price that factories receive for their goods, has fallen steadily for nearly three years in China in a prolonged bout of deflation. The long-running issue spilled over into global markets as low-priced Chinese exports worsen trade friction with key trading partners including the United States and Europe. In a series of recent statements, the Chinese government and industry associations have signaled they're getting serious about reining in cut-throat competition, known as invollution or 'neijuan' in Chinese. The top 10 makers of glass for solar panels agreed on June 30 to shut kilns and cut production by 30%, an industry association said. The government has launched an auto safety inspection campaign, addressing concerns that automakers were skimping on quality to cut costs. It's unclear whether these efforts will succeed, but the sense that China may finally be tackling this chronic problem was enough to spark a rally in stocks in some of those under-pressure sectors. Shares of Liuzhou Iron & Steel Co. gained 10% on Friday and have risen more than 70% since June 30. Solar panel glass producer Changzhou Almaden Co. fell at the end of last week but is still up about 50%. More broadly, two exchange traded funds in solar panels and steel have risen about 10%, outpacing a 3.2% rise in the Shanghai Composite, China's leading market index. The performance of EV-maker stocks has been mixed, with Li Auto and Nio recording double-digit percentage gains while market leader BYD declined. Foreigners can't buy Chinese stocks directly but they are able to invest in about 2,700 stocks and 250 exchange traded funds through the Hong Kong exchange. The gains follow high-level government pronouncements against disorderly price wars. On June 29, the People's Daily newspaper, the mouthpiece of the ruling Communist Party, ran a lengthy page 1 article on involution, saying they run counter to the party's goal of high quality economic development. Chinese leader Xi Jinping weighed in at a closed-door economic meeting, calling for better regulating competition and incentives by local governments to attract factory investments that are blamed for overinvestment in affected industries. The tougher talk began with a focus on automakers in late May, specifically around electric vehicle price wars that began more than three years ago. Analysts at investment bank UBS said the shift is good news for auto industry profits and company stocks. 'Though it's difficult to imagine a sudden U-turn of the industry from fierce competition to orderly consolidation, it's indeed possible to have near-term ceasefire of the price war,' they wrote. After BYD launched another round of price cuts on May 23, some competitors, the main industry association and government all called for fair and sustainable competition. The EV battery industry, the cement association and major construction companies have issued statements echoing calls for an end to excess competition. The term involution, which suggests a spiraling inward and shrinking, was initially applied in China to students and young workers, who felt they were caught up in meaningless competition that led nowhere as the job market weakened and wages stagnated in recent years. At the industry level, it has come to mean sectors that have too many companies competing for a slice of the pie, leading to fierce price cutting to try to gain market share. The mismatch between production capacity — how much an industry can make — and actual demand for the product, reflects overcapacity that forces companies to compete for survival in a limited market space, said a recent article in the Communist Party magazine Qiushi. Some Chinese industries, especially steel and cement, have long suffered from overcapacity. A government push to promote green industries has fostered similar problems in that sector, including solar panels, wind turbines and electric vehicles. A flood of Chinese exports is leading to more trade barriers in Europe and the U.S. and in some emerging markets such as Mexico, Indonesia and India. Ultimately, economists say industries need to consolidate through company mergers and bankruptcies. But the process will take time. A major obstacle is provincial governments that want to protect local companies and jobs. Alicia García-Herrero, the chief economist for Asia-Pacific at the Natixis investment bank, said that recent comments by top Chinese economic officials suggest they realize something needs to be done. 'How much is action versus words, I don't know,' she said. 'But I do think it's a big problem for China.'
Associated Press
37 minutes ago
- Associated Press
S&P initiates coverage and assigns 'A' rating to Fidelidade
HONG KONG, July 21, 2025 /PRNewswire/ -- On 18 July 2025, – Standard & Poor's (S&P), one of the world's leading international credit rating agencies, initiated coverage and assigned Fidelidade – Companhia de Seguros, S.A. and its reinsurance company, Fidelidade RE – Companhia de Resseguros, S.A., long-term Issuer Credit Ratings (ICR) and Financial Strength Ratings (FSR) of 'A', with a stable outlook. S&P anticipates that, over the next two years, Fidelidade will maintain its leadership position in both the domestic and international markets, continue to display robust capital strength and profitability, with solid annual growth and prudent risk management. In its assessment, S&P highlighted that Fidelidade has achieved an earnings diversification and a globalized insurance portfolio, leveraging its leading market positions with a 30% market share in Portugal and international operations in Peru, Chile, Africa, and Asia. In 2024, Fidelidade recorded a consistent financial performance with a 12.6% growth in insurance revenues and net income of EUR173.5 million. It is worth noting that Fidelidade's Solvency II ratio reached 194% at year-end 2024, demonstrating its consistent profitability and strong capitalization. Additionally, its international operations accounted for 30% of its total premiums, marking a substantial progress in Fidelidade's globalization strategy. The assignment of 'A' rating to Fidelidade by S&P highlights S&P's firm recognition of Fidelidade's quality and balance business portfolio, growing international diversification, consistent financial performance and solid capital position. This marks the second 'A' credit rating achieved by Fidelidade. In September 2024, Fitch Ratings, another world's leading international credit rating agency, upgraded Fidelidade's ratings to A+ from A (Insurer Financial Strength – IFS) and A from A- (Issuer Default Rating – IDR), with a Stable Outlook – the highest rating ever awarded by Fitch to a Portuguese company at the time. Rogério Campos Henriques, CEO of Fidelidade, stated, 'The recognition by two of the world's leading rating agencies reinforces confidence in the strategy we have been pursuing. It is the result of rigorous financial discipline, prudent management, and a clear focus on creating value for our customers, shareholders, and partners.' Fidelidade is one of the four core subsidiaries of Fosun International ( It has consistently maintained the top market share in Portugal for many years, with operations spanning across Europe, Africa, Latin America, Macau SAR, and other countries and regions. In recent years, leveraging Fosun's global ecosystem, Fidelidade has not only continued to solidify its leading position in the Portuguese market but has also achieved remarkable results in international business expansion and innovative development, particularly gaining a leading position in markets such as Peru and Bolivia. View original content: SOURCE Fosun
