Shares of Apple and Tesla have fallen on growing concerns about delays in their production lines in China.
Apple shares hit their lowest point since June 2021. Tesla shares are down 73 percent from a record high in November 2021.
Companies have found it difficult to continue production in China due to COVID-19 restrictions and weeks of lockdowns.
Now they are facing a staffing crisis as China battles a Covid wave after restrictions are lifted.
China announced it will lift its strict quarantine rules for travelers on Jan. 8, a positive sign for many investors who are eyeing an easing in supply chain movement in 2023.
But global investors are also being cautious ahead of rising interest rates, a slowing global economy and the ongoing war in Ukraine.
Given the surge in COVID-19 cases in major manufacturing hubs, analysts say output will take time to pick up again.
“Factories will experience labor shortages for at least 4-6 weeks as the wave passes through their manufacturing regions, and of course most migrant workers will return to their villages for the Lunar New Year at the end of January.” says Simon Baptist, chief economist at the Economist Intelligence Unit.
“Production appears unlikely to return to normal in China until late February.”