Markets overview with Auto news | Calamatta Cuschieri

Markets overview, Tesla shares under pressure and VW to spend billions in investment

LG Chem Ltd. will start deliveries of batteries for electric vehicles to Volkswagen AG
LG Chem Ltd. will start deliveries of batteries for electric vehicles to Volkswagen AG

Overview

European stock markets finished the Thursday trading session with sharp losses after the Italian government agreed to press on with the plans to keep the budget deficit at 2.4% in 2019, but reduce the 2020 and 2021 targets to 2.2% and 2%, respectively. At the same time, it was reported that the government led by Prime Minister Giuseppe Conte is targeting gross domestic product (GDP) growth of 1.5% in 2019, while GDP targets for 2020 and 2021 are set at 1.6% and 1.4%.

Regarding Brexit negotiations, European Council President Donald Tusk said that the bloc offered to the UK "from the very beginning" a so-called "Canada+++ deal" which is "much further-reaching on trade, internal security and foreign policy cooperation" than the Chequers proposal put forward by the British government.

The FTSE 100 ended the session 1.25% in the negative territory, with Ocado online supermarket the worst performer. The DAX finished the trading day 0.35% lower, dragged down by Continental manufacturing company. Meanwhile, the CAC 40 was down 1.44% at the closing bell, Valeo auto parts manufacturer contributing to most losses. The Italian FTSE MIB lost 0.53%, weighed down by Moncler.

The Dow Jones Industrial Average continued in the red as the yield on the benchmark 10-year Treasury note reached its highest level since 2011, falling over 300 points. Meanwhile, the so-called FAANG (Facebook, Amazon, Apple, Netflix and Google) group of stocks traded red across the board.

Tesla shares under pressure

Tesla Inc. shares sank more than 5% after the company published its sales report and as chief executive Elon Musk reached a settlement with the Securities and Exchange Commission (SEC). The stock dropped around 5%. The SEC accused Musk of misleading the public with "false statements" about taking the company private at $420 per share. The charges were eventually settled and Musk agreed to pay a $20 million fine and step down as the chairman of Tesla for at least three years.

Volkswagen to source car batteries from LG Chem

According to documentation filed with South Korean regulators, LG Chem Ltd. will start deliveries of batteries for electric vehicles to Volkswagen AG late next year. The manufacturer revealed the plan after it was picked by the German auto giant.

Earlier, the two companies established a biweekly task force during a visit to LG Chem's plant in Poland as Volkswagen said it wants to ensure stable supply for 300,000 units per year from 2021. The Korean firm also has production facilities in the home country, China and the United States. Details about the shipments will depend on demand and market conditions, said the battery maker, which also has contracts with General Motors, Volvo, Renault, Hyundai and Kia.

Volkswagen plans to spend more than $2 billion on models and on two new facilities in China, increasing total investments in the world's biggest auto market to nearly $8 billion.

 

Disclaimer: This article was issued by Rodrick Duca, trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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