Trade Fears Grip Asian Markets
The reports over the weekend that the United States might impose new tariffs on $200 billion worth of Chinese goods as early as this week sent Asian markets in negative territory.
The Greater China markets lost on Monday with the Shanghai Composite closing –1.11% lower and the Shenzhen Composite shedding -1.53%. Hong Kong’s Hang Seng Index also dropped -1.4%. South Korea’s Kospi managed to pare down earlier losses but still closed -0.66% with big name Samsung Electronics falling -1.53%.
A source told CNBC on Sunday that Washington will not impose the earlier announced 25% tariff but a lower 10% import levy. The Wall Street Journal published the same information on Saturday.
China Rethinking Position on Fresh Trade Talks with the U.S.
If the Trump administration pushes through with additional tariffs on Chinese imports later this month, Beijing may decline their offer to hold a new round of high-level trade talks. The Wall Street Journal published the report on Sunday citing officials from China.
In one quote, a senior Chinese official was saying their country would not negotiate “with a gun pointed to its head.” Other advisers are suggesting that China impose limits on the sale of parts and supplies needed by U.S. businesses, using “export restraints” to threaten their supply chains.
Treasury Secretary Steven Mnuchin set September 20 as the date when fresh trade talks are to begin. Although China had begun discussing plans to participate, the government is rethinking its position because of the possibility that new tariffs may take effect this week.
Meredith Corp. to Sell Time Media Brand to Salesforce CEO
Meredith Corp (MDP) disclosed on Sunday that it entered into a definitive agreement with Marc and Lynne Benioff to sell the Time media brand for $190 million in cash.
At the same time, the U.S. media company said Time’s purchase by the Benioffs was not related in any way to Salesforce.com Inc. (CRM). Marc Benioff is the chairman, co-chief executive and founder of Salesforce.
Time’s current executive leadership team will continue to supervise the day-to-day operations or make the journalistic decisions. The company said Marc and Lynne Benioff will not involve themselves in the operations. But Meredith will provide short-term business continuity services as part of the deal.
A multi-year agreement was also reached where Meredith is to provide services such as consumer marketing, subscription fulfillment, paper purchasing, and printing. Meredith will use the proceeds from the sale to pay down debt. They want to reduce debt by $1 billion during fiscal 2019.
Tesla’s Woes Shift to Delivery Snags
After reckoning with production delays that caused its stocks to drop, Tesla Inc. (TSLA) is faced with a new headache. Chief Executive Officer Elon Musk himself acknowledged on Sunday that the electric carmaker’s problems have now shifted to delivery logistics. This is the latest snag that could undermine its efforts to achieve profitability.
Musk said in a tweet in response to a customer complaint on delivery delay, “Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly.”
The company has been working to overcome production bumps after failing to meet production targets for its Model 3 sedans. They are promising to produce a total of up to 55,000 Model 3s in the third quarter. Musk said last week the company would eliminate some color options for its electric cars to streamline production.
Amazon Launches Investigation into Employees’ Misconduct
With allegations that some of its employees are offering to leak confidential information and delete negative product reviews in exchange for money, Amazon.com Inc. (AMZN) is launching an investigation.
The Wall Street Journal reported on Sunday that staff members of Amazon are peddling internal data and other advantages that independent merchants can use to try to get higher rankings for their products in searches on the site.
The article also said the practice is “particularly pronounced in China.” A company spokeswoman told CNN that an investigation into the claims is ongoing. Amazon was investigating a number of incidents including the involvement of employees in the United States.