Business

By Scott Murdoch

HONG KONG (Reuters) – Asian shares tumbled on Tuesday after Wall Street hit a confirmed bear market milestone and bond yields struck a two-decade high on fears aggressive U.S. interest rate hikes would push the world’s largest economy into recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.9%.

Australian shares S&P/ASX200 sank 5% in early trade, while Japan’s Nikkei stock index was down 1.74%.

In Hong Kong, the Hang Seng Index slipped 1.44% and China’s CSI300 Index was down nearly 1% at the open.

The negative tone in Asia follows a bleak session in the U.S on Monday, which saw Goldman Sachs forecast a 75 basis point interest rate hike at the Federal Reserve’s next policy meeting on Wednesday.

“The U.S. will see rate rises faster and higher than Wall Street has been expecting,” James Rosenberg, Ord Minnett advisor in Sydney told Reuters. “There will likely be the double impact of earnings forecasts being trimmed and further price to earnings derating.”

Expectations for aggressive U.S rate hikes rose after inflation in the year to May shot up by a sharper than predicted 8.6%.

Fears of higher rates leading to a U.S. recession kicked the S&P 500 down 3.88%, while the Nasdaq Composite lost 4.68%. The Dow Jones Industrial Average fell 2.8%.

The benchmark S&P 500 is now down more than 20% from its most recent record closing high, confirming a bear market, according to a commonly used definition.

In U.S. trading, benchmark 10-year Treasury yields hit their highest since 2011 on Monday and a key part of the yield curve inverted for the first time since April as investors braced for the prospect that attempts to stem soaring inflation would dent the economy.

Early in Asia, the yield on benchmark 10-year Treasury notes rose to 3.3828% compared with its U.S. close of 3.371% on Monday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 3.4002% compared with a U.S. close of 3.281%.

“Higher inflation, slower growth and higher interest rates are a damaging combination for financial assets,” ANZ strategists wrote on Tuesday.

The dollar dropped 0.06% against the yen to 134.32 but remains close to its more-than-two-decade high of 135.17 reached on Monday.

The European single currency was flat at $1.0407, having lost 3.04% in a month, while the dollar index, which tracks the greenback against a basket of major currencies, was up at 105.19.

Bitcoin fell around 4.5% on Tuesday to $21,416, a fresh 18 month low, extending Monday’s 15% fall as markets were jolted by crypto lender Celsius suspending withdrawals.

U.S. crude dipped 0.06% to $122.14 a barrel. Brent crude was down 0.13% 122.14 per barrel.

Gold was slightly lower with the spot price at $1,818.7395 per ounce. [GOL/]

(Reporting by Scott Murdoch in Hong Kong; Additional reporting by Alun John; Editing by Sam Holmes)

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DUBAI, United Arab Emirates (AP) — Venezuelan President Nicolas Maduro visited Kuwait on Monday and spoke to the small, oil-rich nation’s crown prince, state media reported.

The state-run KUNA news agency offered little detail on Maduro’s talks with Sheikh Meshal Al Ahmed Al Jaber.

It reported the two men spoke at Kuwait International Airport alongside Maduro’s delegation, including his wife, Cilia Flores.

Venezuela’s state-run broadcaster VTV noted Kuwait and Venezuela both were part of the original members of the oil cartel OPEC. Maduro’s Twitter account said the president wanted to expand on those ties.

Maduro’s visit comes after he traveled to Tehran, Iran, for meetings over the weekend, including with Supreme Leader Ayatollah Ali Khamenei.

Maduro is on a Eurasia tour after President Joe Biden decided not to invite him to the Summit of the Americas, which began Thursday. His stops earlier this week included Algeria and Turkey.

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By Scott Murdoch

HONG KONG (Reuters) -Asian shares tumbled on Tuesday after Wall Street hit a confirmed bear market milestone and bond yields struck a two-decade high on fears aggressive U.S. interest rate hikes would push the world’s largest economy into recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.9%.

Australian shares S&P/ASX200 sank 5% in early trade, while Japan’s Nikkei stock index was down 1.74%.

The negative tone in Asia follows a bleak session in the U.S on Monday, which saw Goldman Sachs forecast a 75 basis point interest rate hike at the Federal Reserve’s next policy meeting on Wednesday.

“The U.S. will see rate rises faster and higher than Wall Street has been expecting,” James Rosenberg, Ord Minnett advisor in Sydney told Reuters. “There will likely be the double impact of earnings forecasts being trimmed and further price to earnings derating.”

Expectations for aggressive U.S rate hikes rose after inflation in the year to May shot up by a sharper than predicted 8.6%.

Fears of higher rates leading to a U.S. recession kicked the S&P 500 down 3.88%, while the Nasdaq Composite lost 4.68%. The Dow Jones Industrial Average fell 2.8%.

The benchmark S&P 500 is now down more than 20% from its most recent record closing high, confirming a bear market, according to a commonly used definition.

In U.S. trading, benchmark 10-year Treasury yields hit their highest since 2011 on Monday, and a key part of the yield curve inverted for the first time since April as investors braced for the prospect that attempts to stem soaring inflation would dent the economy.

Early in Asia, the yield on benchmark 10-year Treasury notes rose to 3.3828% compared with its U.S. close of 3.371% on Monday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 3.4002% compared with a U.S. close of 3.281%.

“Higher inflation, slower growth and higher interest rates are a damaging combination for financial assets,” ANZ strategists wrote on Tuesday.

The dollar dropped 0.06% against the yen to 134.32 but remains close to its more-than-two-decade high of 135.17 reached on Monday.

The European single currency was flat at $1.0407, having lost 3.04% in a month, while the dollar index, which tracks the greenback against a basket of major currencies, was up at 105.19.

Bitcoin fell around 4.5% on Tuesday to $21,416, a fresh 18 month low, extending Monday’s 15% fall as markets were jolted by crypto lender Celsius suspending withdrawals

U.S. crude dipped 0.06% to $122.14 a barrel. Brent crude was down 0.13% 122.14 per barrel.

Gold was slightly lower. Spot gold was traded at $1818.7395 per ounce. [GOL/]

(Reporting by Scott Murdoch in Hong Kong; Additional reporting by Alun John; Editing by Sam Holmes)

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By Foo Yun Chee

BRUSSELS (Reuters) -Amazon has offered to share marketplace data with sellers and boost the visibility of rival products on its platform, trying to persuade EU antitrust regulators to close their investigations without a fine by the end of the year, people familiar with the matter said.

The world’s largest online retailer is hoping its concessions will stave off a potential European Union fine that could be as much as 10% of its global turnover, Reuters reported last year.

The European Commission in 2020 charged Amazon with using its size, power and data to push its own products and gain an unfair advantage over rival merchants that sell on its online platform.

It also launched an investigation into Amazon’s possible preferential treatment of its own retail offers and those of marketplace sellers that use its logistics and delivery services.

Amazon’s process for choosing which retailer appears in the “buy box” on its website and which generates the bulk of its sales also came under the spotlight.

Amazon has now proposed to allow sellers access to some marketplace data while its commercial arm will not be able to use seller data collected by its retail unit, the people said.

The company will also create a second buy box for rival products in the event an Amazon product appears in the first buy box, the people said.

The EU competition enforcer is expected to seek feedback from rivals and users in the coming weeks, which could lead to tweaks in the proposal and a final decision by the end of the year, the people said.

The Commission and Amazon declined to comment. The company had previously said it disagreed with the watchdog’s assertions and that it represents less than 1% of the global retail market.

(Reporting by Foo Yun CheeEditing by Emdund Blair and Mark Potter)

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BRUSSELS (Reuters) – Amazon has offered to limit its use of seller data and boost the visibility of rival products on its platform in a move that could lead to EU antitrust regulators closing their investigations without a fine by the end of the year, people familiar with the matter said.

The world’s largest online retailer is seeking to stave off a potential European Union fine that could be as much as 10% of its global turnover with its offer, Reuters reported last year.

The European Commission in 2020 charged Amazon with using its size, power and data to push its own products and gain an unfair advantage over rival merchants that sell on its online platform.

It also launched an investigation into Amazon’s possible preferential treatment of its own retail offers and those of marketplace sellers that use its logistics and delivery services.

(Reporting by Foo Yun Chee; Editing bby Emdund Blair)

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By Iain Withers

LONDON (Reuters) -The safe-haven dollar gained towards new two-decade highs versus major rival currencies on Monday, supported by fears of a global economic slowdown and bets on steep interest rate hikes by the U.S. Federal Reserve.

The yen was among a host of currencies swept lower on the day, hitting its lowest level versus the dollar since 1998, as the gap between Japanese and U.S. benchmark yields widened after red hot U.S. inflation data on Friday.

A sell-off across markets saw European stocks fall for a fifth straight session, while Bitcoin tumbled 12% to 18-month lows below $24,000.

The dollar index – which tracks the greenback against six major peers – gained as much as 0.6% versus Friday’s close to 104.84, close to the two-decade peak of 105.01 hit in May. It was last at 104.75.

Central banks’ efforts to curtail runaway inflation will remain in focus this week.

The Federal Reserve and the Bank of England are expected to raise interest rates at their meetings and there is a chance the Swiss National Bank will do the same.

The Bank of Japan (BoJ) has so far resisted pressure to tighten policy, weakening the country’s currency. The policy divergence has sent the yen down more than 15% against the dollar since early March.

Japan’s top government spokesperson said on Monday Tokyo stood ready to “respond appropriately” if needed.

The yen fell as much as 0.6% on the day to 135.22 yen per dollar, its lowest since 1998. It was last broadly flat at 134.38 yen per dollar.

“Everything suggests the BoJ thinks loose policy is still the right policy to pursue. I suspect inflation will have to accelerate a lot more before the BOJ starts getting worried,” said Francesca Fornasari, head of currency solutions at asset manager Insight Investment.

Currency analysts at MUFG said in a note developments overall suggested further near-term yen weakness. “But market participants will be more wary of the risk of intervention and/or a hawkish shift in BoJ policy in the week ahead,” they added.

The downward pressure on the yen could encourage speculation of a return to yen weakness not seen since the Asian financial crisis in 1997, when it hit 140.00 – the last time Japan directly intervened to support the currency, the note added.

The euro, sterling and the Swiss franc all fell to around four-week lows versus the dollar on the day.

The euro slipped as much as 0.6% to $1.04520.

Sterling fell 1% to $1.21920, after data showed Britain’s economy unexpectedly shrank in April.

The Swiss franc dropped as much as 0.7% to 0.99440 franc per dollar.

(Reporting by Iain WithersAdditional reporting by Alun John in Hong KongEditing by Mark Potter and David Evans)

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(Reuters) – Thousands of South Korean truckers were on strike for a sixth day on Sunday, protesting over pay as fuel costs surge, disrupting production, slowing port operations and posing new risks to a strained global supply chain.

Following are details of the disruption, lost production and reactions from union officials and businesses.

AUTOS

Production at Hyundai Motor Co’s biggest factory complex, in Ulsan, fell to about 60% on Friday because of component shortages caused by the strike, a union official at the automaker said.

The plants operated for extra runs over the weekend to clear backorders. Hyundai said there was disruption but declined to provide details and expressed hope of returning to normal as soon as possible.

Hyundai Motor’s Ulsan factories make about 6,000 vehicles daily, the union says. The strike had cost the automaker 4,000 to 5,000 vehicles as of Friday – worth up to 235 billion won ($180 million).

Several hundred truckers staged a weekend sit-in outside Hyundai’s Ulsan complex but did not block vehicles from going in or out, a Reuters witness said.

Employees at Kia Corp’s Gwangju plant were using newly assembled cars to make deliveries, media reported.

BATTERIES

LG Energy Solution, SK Innovation’s battery unit SK On and Samsung SDI Co together command more than one-fourth of the global electric vehicle battery market.

One of the three made shipments before the strike as a precaution, a company official said. The firm did not experience disruptions last week but will reassess its handling of shipments if the strike continues, the official said.

SEMICONDUCTORS

The truckers plan to stop shipments of raw materials for semiconductors produced in Ulsan, said union official Park Jeong-tae.

Samsung Electronics Co and SK Hynix, two of the world’s biggest memory chip makers, declined to comment.

A major tech manufacturer does not expect near-term disruptions given its inventories of raw materials, an official said.

CEMENT, STEEL

Steelmaker POSCO said the strike had halted shipments from two plants by about one-third, or 35,000 tonnes a day.

A major cement maker had stopped shipping for four days as of Friday with truckers outside the gate, raw materials were running out and storage was about to hit capacity, an executive said.

Truckers blocked the entry to the work sites of Hanil Cement Co and Sungshin Cement Co in Chungcheong province, Newsis reported. The companies plan to boost shipping by train to minimise the impact, it said.

REFINERS, PETROCHEMICALS

The number of vehicles entering an Ulsan petrochemical complex has fallen some 90% from normal levels and truckers would be telling non-union drivers not to enter the complex, said Park from the truckers union.

The strike threatens logistics for polyethylene and polypropylene, said a person familiar with South Korea’s petrochemical operations.

A major refiner had not seen much impact on shipments and deliveries as of Thursday, and petrol stations usually had inventories to cover two weeks, but the situation would worsen if the strike were prolonged, a company official said.

South Korea has the world’s fifth-largest refining capacity and had 3.3 million barrels per day of crude oil distillation refining capacity at the beginning of 2020.

HITE JINRO

Police have made more than two dozen arrests including members of the truckers union for blocking the Hite Jinro brewery in Icheon southeast of Seoul, Yonhap news reported.

PORTS AND CONTAINERS

Busan Port, the world’s seventh-biggest container port, said the strike had cut its container traffic by two-thirds from normal levels.

Container storage sites are filling up and authorities are discussing measures to secure more, a government official said.

The movement of containers at Ulsan port, which accounts for about 10% of South Korea’s port traffic, has been suspended since Tuesday, a government official said.

($1 = 1,279.3200 won)

(Reporting by Seoul bureau; Editing by Robert Birsel and William Mallard)

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GENEVA (Reuters) – World Trade Organization director-general Ngozi Okonjo-Iweala urged trade ministers gathering in Geneva to go the extra mile over the coming days and said she would consider one or two global trade deals a success.

“Let me be clear, even landing one or two will not be an easy road. The road will be bumpy and rocky. There may be a landmine along the way,” she told a news conference before the start of the ministerial conference on Sunday.

(Reporting by Emma Farge and Philip Blenkinsop)

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NEW YORK (AP) — Tesla proposed a three-for-one split of its stock on Friday, a move that will make a single share of the electric car maker more accessible to investors but not affect the company’s overall market value.

Tesla Inc. made the announcement in its annual proxy statement, which also said Oracle co-founder Larry Ellison will not be standing for re-election to the company’s board.

The company said in late March that was planning to split its stock for the second time in two years. At that time the shares were trading at over $1,000 each.

But Tesla’s stock has fallen about 39% since early April, shortly after its CEO Elon Musk started raising the idea of buying Twitter. Shares in the company headquartered in Austin, Texas, closed Friday at $696.69.

Share splits are used by companies when their stock price gets too high for retail investors to buy individual shares, or when a company wants more shares to exist in the marketplace to make the stock more liquid to trade.

In its statement, Tesla said it was trying to accomplish both of these goals: giving its employees greater quantities of shares as well as making the stock more accessible to retail investors.

Musk is planning on using his Tesla shares as collateral for buying Twitter, as well as potentially selling down his stake in the company to help with financing.

Tesla shareholders will vote on the share split at the company’s annual meeting on Aug. 4.

The company, meanwhile, said Ellison, a major Tesla investor and friend of Musk’s, will be stepping down from its board. Ellison was one of two independent members named to the board in late 2018 as part of a settlement with the Securities and Exchange Commission, which had demanded more oversight of Musk.

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(Corrects this June 8 story to remove reference to the United Arab Emirates and the Kingdom of Saudi Arabia in paragraph 2)

(Reuters) – Lockheed Martin Corp expects to produce its new-build F-16 fighter jets next year and commence deliveries in 2024, its chief financial officer Jesus Malave said on Wednesday.

The company has a list of key U.S. allies including Bahrain, Taiwan, Slovakia and Jordan eager to purchase the jet.

Malave flagged that hiring new workforce and training employees to build the aircraft was a “little bit of a challenge” for the company than expected.

“So the ramp is taking a little bit longer. As a result, we will probably see some cost burden on our initial contract there,” Malave said while speaking at the UBS Global Industrials and Transportation Conference.

The F-16 is considered a highly maneuverable aircraft proven in air-to-air combat and air-to-surface attack.

In April, the U.S. State Department approved the potential sale of up to eight F-16 aircraft and related equipment to Bulgaria, in a deal valued at $1.673 billion, and said Lockheed will be the principal contractor.

“There’s a lot of interest in the aircraft. I think an aspiration probably the next few years would be probably [production of] 3 per month,” Malave added.

(Reporting by Aishwarya Nair in Bengaluru; Editing by Krishna Chandra Eluri)

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