Bloomberg
“Stocks Rise as Investors Adopt a Risk-On Attitude: Markets Wrap.”
U.S. stocks rose as investors regained their appetite for risk appetite as trade tensions between the U.S. and China cooled further after the Chinese government said it’s planning to cut car tariffs by 15 percent. The dollar climbed with Treasuries, and crude surged to the highest price since November 2014.
All major equity benchmarks were higher, led by semiconductor stocks. The S&P 500 Index advanced, and the Nasdaq 100 Index paced gainers. The Stoxx Europe 600 Index nudged higher, while emerging market shares advanced, ending a three-day losing streak.
The euro fluctuated as investors weigh the chances Italy’s president will seek to curtail a potential populist government, while the country’s bonds rebounded from a two-day slide. The Turkish lira fell to yet another record low. Sterling strengthened amid speculation there could be another U.K. election and after upbeat comments from a Bank of England policymaker.
Beyond politics, central banks are also in focus this week. The Federal Reserve will release minutes of its latest policy meeting on Wednesday, while the ECB follows suit on Thursday. A raft of U.S. debt sales adds to the busy agenda.
Reuters
“Trump to press South Korea’s Moon before summit with North.”
President Donald Trump will meet South Korean President Moon Jae-in on Tuesday as U.S. officials try to assess North Korea’s intentions after Pyongyang threatened to pull out of a planned June 12 summit to discuss denuclearization.
Moon’s White House visit was intended to be a fine-tuning of the U.S. and South Korean strategy for dealing with North Korean leader Kim Jong Un.
South Korea led efforts to resume dialogue with North Korea and Moon gave enthusiastic accounts of its encounters with Kim, spurring Trump to accept an offer of a first-ever meeting between U.S. and North Korean presidents.
But the White House was caught off-guard when, in a dramatic change of tone, North Korea last week condemned the latest U.S.-South Korean air combat drills, suspended North-South talks and threw into doubt the summit with Trump if Pyongyang was pushed toward “unilateral nuclear abandonment.”
Moon was scheduled to arrive at the White House at noon EDT (1600 GMT) for a meeting and a working lunch and due to leave less than two hours later.
Trump has insisted he remains committed to the summit. His aides are looking to Moon to help determine whether Kim is taking a harder line against denuclearization than South Korea had previously communicated to them, a U.S. official said, speaking on condition of anonymity.
BBC News
“Elon Musk admits Tesla braking flaw.”
Tesla boss Elon Musk has admitted there is a braking issue in its Model 3 cars but promised a firmware update to fix it «in the next few days». The problems were flagged up in a review of the electric car by US website Consumer Reports.
«Our testers found flaws – big flaws – such as long stopping distances in our emergency braking test and difficult-to-use controls,» wrote Patrick Olsen. Tesla had at first disputed the findings. The reviewer said braking distances on average were 152ft (46m), adding that that «was far worse than any contemporary car we’ve tested».
In response, Tesla released a statement which read: «Tesla’s own testing has found braking distances with an average of 133ft when conducting the 60-0 mph stops using the 18″ Michelin all season tyre and as low as 126ft with all tyres currently available.» But later Mr Musk tweeted that the issue would be dealt with before the end of the week.
Tesla’s long-awaited successor to its Model S has had more than 400,000 pre-orders, making it one of the most anticipated mass-production vehicles ever. The electric car comes with a starting price tag of $35,000 (£29,600) and has been described by Mr Musk as affordable for the mass market.
It has faced repeated production and manufacturing delays and when deliveries started in July, it was for a more expensive version that included a long-range battery package which cost an extra $9,000.
Recently Mr Musk unveiled specifications for a faster and more powerful version of the Model 3 which will cost $78,000, which does not include the Autopilot driver-assist feature. Consumer Reports stopped short of recommending the Model 3, despite describing it as an «impressive performance sedan».
Bloomberg
“China Makes Massive Cut to Car Tariffs After Truce With Trump.”
China will cut the import duty on passenger cars to 15 percent, further opening up a market that’s been a chief target of the U.S. in its trade fight with the world’s second-largest economy.
The Finance Ministry said Tuesday the levy will be lowered effective July 1 from the current 25 percent that has been in place for more than a decade, boosting shares of automakers from India to Europe. Bloomberg News reported last month that China was weighing proposals to reduce the car import levy to 10 percent or 15 percent.
A reduction in the import duty follows a truce between President Donald Trump’s administration and Chinese officials as they seek to defuse tensions and avert an all-out trade war. While the levy reduction could be claimed in some quarters as a concession to Trump and will be a boon to U.S. carmakers such as Tesla Inc. and Ford Motor Co., the move will also end up benefiting European and Asian manufacturers from Daimler AG to Toyota Motor Corp.
Shares of Jaguar Land Rover owner Tata Motors Ltd. and BMW AG posted their biggest intraday gains in more than a month on the news. The Finance Ministry in Beijing said later Tuesday that the step is intended to help reduce prices and aid competition.
The import duty on car parts will be reduced to 6 percent, China’s Finance Ministry said. The shift is significant more for its optics than its potential impact given imported cars made up only about 4.2 percent of the country’s 28.9 million in automobile sales last year.
The latest round of tariff easing is part of a flurry of policy announcements in recent months aimed at demonstrating China’s commitment to opening the economy — partly in response to the accusations of protectionism leveled by the Trump administration. Beijing has also pledged to cut ownership limits in the auto sector as well as in banking, and last November reduced import tariffs on almost 200 categories of consumer products.