Stocks of Apple and Tesla have fallen as worries about delays in their Chinese production lines rise. Apple’s stock fell to its lowest level since June 2021. Since reaching a record high in November 2021, Tesla’s stock has decreased by 73%.
Due to COVID restrictions and weeks of lockdowns, businesses have found it difficult to maintain production in China. As China confronts a Covid wave after relaxing years of prohibitions, they are currently experiencing a staffing shortage.
The announcement by China that it will relax its tight travel quarantine regulations on January 8 is welcome news for many investors who anticipate easier supply chain movement in 2023. However, global investors are also being wary in light of more interest rate increases, a recession in the global economy, and the ongoing conflict in Ukraine.