Asia Down Heavily, EM Currencies Keep Falling, South Africa Slaughtered
Hong Kong is leading Asian equities down this morning, Hong Kong’s Hang Seng leading the plunge down 650 points or 2.3%. China’s Shanghai Composite comes in second with a loss of 1.7%, though the Yuan remains stable against the dollar unlike other emerging market currencies that continue their collapse today. The Indian Rupee (INR=X) has hit a new all time low against the Dollar at close to 72, and South Africa’s Rand (ZAR=X) is down about 1.6%, a new 52-week low and near all tie lows reached in February 2016. South African stocks were slaughtered yesterday, down over 7% on currency turmoil and market jitters over confiscation of the property of white farmers that continues on.
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Italy Sends Reassuring Message to Brussels, Yields Fall, Stocks Rise
Italy’s FTSEMIB was the only major European stock exchange that registered gains yesterday as Interior Minister Matteo Salvini tried to reassure markets that Italy would stay within the spending rules of the Eurozone by keeping this year’s deficit below the 3% limit, and traders took the bait, sending yields down below 3% and Italian stocks higher. Unfortunately for Italy, Eurozone rules require that a country have a tenable plan to reduce debt once it hits 60% of GDP. Italy’s is over twice that level, so it may be a bit late to merely stay within deficit limits. According to Bloomberg, Italy has been running a primary surplus since 2010. It’s just that debt service costs have kept the deficit higher and plunging the country deeper into debt.
Musk Goes Full Pedo On Spelunking Hero, Irritating Tesla Board
Elon Musk, Tesla (NASDAQ:TSLA) CEO, it becoming increasingly unhinged. In a series of emails to Buzzfeed news, he accused British diver Vernon Unsworth of being a pedophile once again, more specifically a “child rapist”, followed by a colorful combination expletive involving a gerund and a body part addressed to the Buzzfeed reporter. Musk says he married a 12 year old, though no word in the mainstream media on whether this is actually true. Unsworth lives in Thailand, where the legal marriage age is 17. Musk reportedly welcomes a lawsuit. Maybe if he wins, Tesla will hit its Model 3 production targets. Tesla was down over 4% yesterday.
Toyota Recalling over One Million Hybrid Cars
Toyota (NYSE:TM) is doing a massive recall of Prius and C-HR hybrids on the risk of fire due to exposed electrical wired that could corrode over time. One vehicle reported smoke, though no injuries were reported, so Toyota is playing it safe rather than risk future explosions. 554,000 cars will be recalled in Japan for repairs, and close to 200,000 in the United States. This is all in a day’s work for Toyota, which back in 2016 had to recall nearly 3 million cars including Prius hybrids over leaky fuel tanks.
Rumors of Coca Cola Takeover of Dunkin Brands
The rumor mill has it that Coca-Cola (NYSE:KO) may be mulling a takeover of Dunkin Brands (NASDAQ:DNKN) if its $5 billion acquisition of British coffee chain Costa works out. The rumors drove Dunkin to its highest level ever on Tuesday. Dunkin refused to comment over speculation, but Dr. Pepper owner JAB is also rumored to want Dunkin. The reason a Coca-Cola takeover would make sense is that Coke has been on a coffee binge lately, and Dunkin is moving up the coffee chain. Coke would like to rival Starbucks, and it may have a chance if Starbucks leaves its bathrooms open to the public.