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Economy

Apple drops plans to increase production of iPhone 14 amid weak iPhone demand

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weak iphone demand

U.S. Apple Inc. is abandoning plans to increase production of new iPhone 14 models due to weak iPhone demand, Bloomberg reported, citing knowledgeable sources.

The company told suppliers that it no longer intends to push for an increase in production of the iPhone 14 by 6 million smartphones in the second half of this year, the agency’s sources said. Instead, Apple plans to produce 90 million smartphones, almost as many as in the second half of the previous year and on par with the company’s forecast released this summer.

iPhone demand down

Apple has updated its production forecasts ahead of the unveiling of the iPhone 14. Some of the company’s suppliers were preparing for a 7% increase in orders for the devices, Bloomberg notes.

But as it turned out, demand for the new models was limited. Sales of iPhones in China, the largest smartphone market, have been declining lately due to the economic downturn. Orders for the iPhone 14 in the country in the first three months after it went on sale were 11% lower than orders for the iPhone 13 in the same period last year, according to Jefferies.

Also, global demand for electronics is depressed this year due to high inflation, recession fears, and supply chain disruptions. The smartphone market is expected to shrink 6.5 percent in 2022, according to IDC’s forecast.

Earlier, we reported that rising food and energy prices are becoming a growing problem for Europe.

Economy

JPMorgan CEO Jamie Dimon warns of recession and high interest rates

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JPMorgan CEO Jamie Dimon warns of recession and high interest rates

NEW YORK – JPMorgan Chase (NYSE:) CEO Jamie Dimon has issued a stark warning about the potential for a global economic downturn, emphasizing the need for preparedness amid rising inflation and economic headwinds. According to media reports today, Dimon cautioned that high-interest rates, which could peak at 7%, may lead to a soft landing or even a mild recession as the global economy seeks to stabilize after the pandemic.

Dimon pointed out that while the U.S. has managed to avoid a recession throughout 2023, it’s crucial not to expect an endless economic boom. He highlighted that severe risks stemming from the pandemic’s aftermath could significantly impact both U.S. and global markets. Wall Street and international investors are paying close attention to Dimon’s experienced-based insights as they face an uncertain financial climate.

Further complicating the economic landscape, Dimon drew attention to the U.S. economy’s “addiction” to debt and central bank liquidity injections, likening it to “heroin.” He argued that pandemic-era stimulus measures have created an economic “sugar high,” with artificially boosted consumer spending and stock market values. Although these efforts helped prevent a depression, he warned against underestimating the persistence of inflationary pressures and anticipates more interest rate hikes.

Dimon also suggested that significant drops in global corporate profits could be on the horizon as economies attempt to return to normalcy without government stimulus. Additionally, he underscored geopolitical tensions, particularly in the Middle East, as potential triggers for market disruptions that could further complicate the economic recovery.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Economy

China has more space to cut reserve ratio instead of interest rates, says ex-official

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China has more space to cut reserve ratio instead of interest rates, says ex-official
© Reuters. FILE PHOTO: Paramilitary police officers stand guard in front of the headquarters of the People’s Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022. REUTERS/Tingshu Wang/File Photo

BEIJING (Reuters) – China is likely to implement proactive fiscal policy next year as there is still a need for the world’s second-biggest economy to realise stable growth, a former central banker was cited as saying in state-owned media on Sunday.

The comment comes as the economy struggles for momentum after being hobbled by lengthy pandemic-busting measures, while market watchers fear severe debt woe among major property developers could spill over to other sectors.

“It is expected that next year China will continue to implement positive fiscal policy, monetary policies that are in line with positive fiscal policy, with a relatively large policy space to lower the reserve requirement ratio,” Sheng Songcheng, a former statistics and analysis director of the People’s Bank of China, said in comments reported by Shanghai Securities News.

With interest rates and loan prime rates at low levels, there is more space to cut banks’ reserve requirement ratio (RRR) than to cut interest rates, Sheng said.

The central bank lowered the RRR in September for the second time this year to boost liquidity and support economic recovery. Analysts expect another cut by year-end.

The weighted average RRR for financial institutions was around 7.4% after the cut.

China is prudent in cutting interest rates as its monetary policy needs to consider internal and external balance, Sheng said.

“It is expected that the interest rate differential between China and the U.S. will enter a period of stabilisation, so the (yuan) is likely to maintain a mild appreciation trend, but the appreciation is limited.”

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Economy

‘Way too early’ to declare victory over inflation, says ECB’s Nagel

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'Way too early' to declare victory over inflation, says ECB's Nagel
© Reuters. Joachim Nagel, President of Germany’s federal reserve Bundesbank addresses the media during the bank’s annual news conference in Frankfurt, Germany March 1, 2023. REUTERS/Kai Pfaffenbach/File Photo

NICOSIA (Reuters) – Euro zone inflation will carry on declining in the months ahead but at a slower pace, Bundesbank President Joachim Nagel was quoted as telling Cypriot newspaper Kathimerini on Sunday.

Euro zone inflation eased to 2.4% in November from 2.9% in October, well below expectations for a third straight month and fuelling market speculation that European Central Bank (ECB) rates could come down quicker than the bank now guides.

“We have not yet won the fight against inflation,” said Nagel, who visited Cyprus last week. He described inflation as a ‘stubborn, greedy beast’ and said the next phase of wrestling it down would be more difficult.

“Add in a scenario where an escalation of geopolitical tensions could imply higher inflation and it becomes clear that it would be way too early to declare victory over high inflation rates,” said Nagel, an influential voice on the ECB’s rate setting Governing Council.

“I can’t tell whether interest rates have already reached their peak. On the ECB Governing Council we decide on interest rates on a meeting by meeting basis following our data-dependent approach.”

Nagel added that the outlook for inflation was tempered by a weakening of dampening base effects and the phasing out of measures to cap high energy prices in many European countries. He also pointed to an expected continuation of strong wage growth.

“All in all, I expect inflation to carry on declining, but at a slower pace and with possible bumps along the way,” Nagel said.

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