Yahoo Finance

Good morning. I'm senior reporter Phil Rosen, reporting from Manhattan. Today we're going over what the ongoing protests in China mean for markets and investors.

Before that, here's a helpful calendar from Insider's Personal Finance team that tells you what days the stock and bond markets are closed for the rest of the year.

Now let's get to the news.

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1. Anti-government protests have erupted from Shanghai to Beijing as citizens rise up in opposition of China's zero-COVID policies. Demonstrations follow the death of 10 people in an apartment fire in Urumqi, which some locals said couldn't be extinguished because of virus control barriers.

Protesters have begun holding up blank pieces of paper in defiance, symbolizing their inability to speak out. Some protesters, too, have taken aim directly at President Xi Jinping.

Some of Apple's key production facilities have been hit by the protests. The tech giant, which has deep manufacturing ties to China, has seen $114 billion in market value erased as investors grow concerned about iPhone shortages stemming from disruptions caused by the demonstrations.

Arthur Laffer Jr., president at Laffer Tengler Investments, said he's surprised it took this long for protests to emerge, given how long China's maintained its strict pandemic lockdowns.

"Markets don't like bad news, and protests are bad news," Laffer told me on a phone call yesterday. "The housing sector is in shambles, people can't go to work, manufacturing is down…that with the COVID lockdowns present fundamental investing issues."

He said his firm right now has no direct exposure to Chinese investments, and likely won't add any unless Beijing signals a dramatic easing of its zero-COVID policy.

Laffer would turn more bullish if President Xi capitulates and opens the economy back up, he said, but even that wouldn't yield much more than a short-term pop in Asian markets.

UBS analysts echoed Laffer's caution, warning that Chinese equities are poised to struggle amid persistent economic headwinds.

Any recovery will be sluggish and remains some way off, the firm believes, despite Beijing's efforts to stimulate the world's second-largest economy.

"Policy support remains focused on stabilizing the economy, rather than spurring growth, in our view," UBS said. "As a result, we remain neutral on Chinese equities."

Thoughts or feedback? Let me know on Twitter (@philrosenn) or email me (prosen@insider.com).

2. US stock futures rise early Tuesday, after Chinese authorities said they were launching a drive to boost senior vaccination rates, raising hopes that the country may relax its zero-COVID strategy. Honk Kong stocks were also up on the news, jumping as much as 5%. Here are the latest market moves.