China continues to struggle with covid cases

Earlier today, China reported 7333 new covid cases, falling by 6.8% in the past 24 hours.

That’s a good sign but there was also a big setback in Shanghai. The city reported zero cases outside of quarantine facilities in the previous two days, inspiring some hope of sustainably eased lockdowns. But today it reported 58 cases in areas called “precautionary zones” where there hadn’t been cases in 14 days. That led to new restrictions in those areas.

In Beijing, 36 new cases were detected, bringin the number to 400 in the latest wave.

Aside from Chinese domestic demand, the market is concerned about fresh supply bottlenecks out of China. Two comments in today’s ISM manufacturing report highlighted longer lead times at US factories directly due to Shanghai shutdowns.