Q3 Review: China’s Tech Crackdown, the Race to Space, and Supply-Chain Difficulties
A Tumultuous Third Quarter Comes to a Close
The third quarter of 2021 has come to a close. The last three months have been tumultuous to say the least. From China’s crackdown on tech companies trading in the US, to supply-chain issues threatening the holiday season, investors and companies had a lot to deal with during the quarter.
Economies around the world also began to see glimmers of hope as more people received COVID-19 vaccinations. However, the Delta variant weighed on this recovery. The world also witnessed two billionaires, Jeff Bezos and Richard Branson, rocket to the edge of space, heating up the competitive space travel industry. Here’s a look at the good, the bad, and the ugly of the third quarter.
China’s Tech Crackdown
During the third quarter, Beijing stepped up its oversight of tech companies trading in the US, sending shares of those tech giants plummeting. Take DiDi (DIDI), the ride-hailing startup which debuted on the New York Stock Exchange at the end of June. China announced an inquiry into the company and ordered that DiDi’s app be removed from app stores. The crackdown on DiDi spooked investors who worried that other Chinese tech stocks trading in the US could also face stricter regulations.
Meanwhile, supply-chain delays, component shortages, rising prices, and labor shortages weighed on industries across the board. Ford (F) and GM (GM) have idled plants, homebuilders have slowed down new construction, and apparel brands are missing out on sales. Analysts expect these supply-chain difficulties to spill over into the fourth quarter.
The Race to Space Heats Up
The quarter will also be remembered for space flights conducted by Virgin Galactic (SPCE) and Blue Origin. The two space companies are in a race to dominate space tourism. In July, a week apart, Richard Branson and Jeff Bezos captured the world’s attention after successfully reaching the outer limits of earth. Virgin Galactic has since announced it is gearing up to launch its first commercial research mission with the Italian air force this fall. Meanwhile, Blue Origin will send two more people on a 10 minute ride to space in mid-October.
The third quarter of 2021 was a complex one. Despite China’s increased oversight of the tech sector and supply-chain issues, corporate profits and stocks have held up. It will be interesting to see what the final three months of the year have in store.
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