• Bloomberg

    South Africa Outlook Cut to Negative by S&P Amid Fiscal Woes

    (Bloomberg) -- South Africa could fall deeper into junk territory after S&P Global Ratings cut the outlook on its assessment of the nation’s debt to negative, citing the slow growth, upwardly revised fiscal deficit and growing debt burden. S&P left unchanged South Africa’s rating of BB, two steps below investment grade.“We could lower the ratings if we were to observe continued fiscal deterioration,” S&P said in a statement.South Africa’s finances are deteriorating due to billions of dollars in bailouts for unprofitable power producer Eskom Holdings SOC Ltd . Gross government debt is set to surge to 80.9% of gross domestic product by fiscal 2028 unless urgent action is taken, the National Treasury said last month. The trajectory is almost 20 percentage points higher than forecast in the February budget and shows no sign of stabilizing.Sixteen of 22 economists surveyed by Bloomberg predicted the move. Another cut means it will take South Africa even longer to regain its investment-grade status at S&P, the first major ratings company to cut the nation to junk in 2017 after former President Jacob Zuma replaced the finance minister in a late-night cabinet shake-up. The nation is now led by Cyril Ramaphosa.Moody’s lowered the outlook on its investment grade rating to negative less than three weeks ago, effectively giving the nation three months to get its finances in order. A Moody’s downgrade would force South Africa out of the FTSE World Government Bond Index, which could prompt a sell-off and outflows of as much as $15 billion, according to Bank of New York Mellon Corp. It will also raise borrowing costs and make it even more difficult for government to finance the budget.Here’s what analysts had to say:Daniel Tenengauzer, head of markets strategy at BNY Mellon in New York:”I don’t think it makes a big difference,” Tenengauzer said. “The only thing that could move the rand from here would be an actual downgrade”“It’s important to keep in mind that Moody’s clearly is the more critical because it could trigger the WGBI exit. Having said that, if the spread between S&P and Moody’s widens too much, that obviously should push Moody’s in that direction as well”Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank Plc in London:The market impact “should be negligible,“ because it was so widely expected, she said. At the same time, though, “It does provide important political cover to both the Ramaphosa administration, and to the Treasury in particular, to pursue faster fiscal and structural reform”Brendan McKenna, a currency strategist at Wells Fargo in New York:S&P’s decision “probably doesn’t impact the currency all that much just given S&P’s credit rating is already non-investment grade,” he said. There’s a small risk, though, that it influences Moody’s Investors Service to downgrade the nation as well.\--With assistance from Andres Guerra Luz.To contact the reporters on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net;Justin Villamil in Mexico City at jvillamil18@bloomberg.netTo contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Ana Monteiro, Alec D.B. McCabeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Tesla Truck Demo Gets Awkward as Shatterproof Windows Shatter

    Tesla Truck Demo Gets Awkward as Shatterproof Windows Shatter

    (Bloomberg) -- Tesla Inc. Chief Executive Officer Elon Musk took to the stage late Thursday to reprise a familiar role: pitching a future vehicle to a throng of adoring fans. This time, it was the “Cybertruck” -- his name for Tesla’s new electric pickup.The angular vehicle, which has a stainless-steel skin, starts at $39,900 and will come in three variants, Musk told a packed audience in Hawthorne, California. Customers can order the truck with a deposit of just $100, though production “nears in late 2021,” Tesla said on its website.After a “Blade Runner”-inspired introduction, Musk had Tesla’s long time chief designer, Franz von Holzhausen, smash the truck’s steel exterior with a sledgehammer, showing that it did not dent.But it was the second demonstration, of “Tesla armor glass,” that was the real show stopper: von Holzhausen unintentionally shattered two of the truck’s windows with a metallic ball, causing Musk to say “Oh my f---ing god.” Given how product launches are usually scripted and rehearsed, the broken windows were the evening’s big surprise.Tesla shares fell 6.1% to $333.04 on Friday, the sharpest decline in almost two months.The evening began with a slide show of standard pickup trucks throughout the years, and Musk’s vow to make something different that runs on sustainable energy.“You want a truck that’s really tough, not fake tough,” Musk said, in what seemed to be a veiled swipe at Ford Motor Co.’s slogan. “A truck you can take a sledgehammer to that doesn’t dent.”Some industry veterans said Tesla will likely have to tone down the design specifications to make it commercially viable. “It’s science fiction. If it ever comes to pass, it will look different and have different specs,” Bob Lutz, a former senior executive who worked at all three Detroit automakers before retiring, said in an email. “A bold new design direction, but in my view not appealing or commercial.”Not for ContractorsTesla fans in the audience liked what they saw.“It’s like something out of a movie set,” said Elizabeth Lepek of Marina del Rey, California, a current Tesla Model X owner who placed a $100 deposit for the Cybertruck. “It’s so futuristic. I like the design of it. There’s nothing quite like it on the road.”But traditional truck buyers are a tougher audience and less likely to be impressed by Silicon Valley sizzle.“It misses the core truck buyer,” said Gene Munster, a managing partner at venture capital firm Loup Ventures. “A contractor is not going to show up to a work site in this truck. That said, Tesla will still sell some of them.”More: You Think the Tesla Cybertruck Looks Stupid? OK, BoomerThe hashtag cybertruck quickly began trending on Twitter as potential customers started sharing their views about the futuristic design -- and the window snafu.And though it will take a long time before the Cybertruck hits the streets, that’s something Tesla customers are used to. Musk unveiled a Semi truck two years ago, but that vehicle has yet to enter volume production.Musk tweeted Friday the truck also will offer an optional two-person all-terrain vehicle, signaling Tesla’s plan to enter the off-road vehicle market.The lucrative full-size pickup market in the U.S. is dominated by the Detroit 3: Ford Motor Co.’s F-150, Fiat Chrysler Automobiles NV’s Ram 1500 and General Motors Co.’s Chevy Silverado. Japanese automakers have spent two decades and billions of dollars to get in on the gravy train, but U.S. brands still control almost 92% of the half-ton segment, according to IHS Markit.More: Tesla’s Mocked Cybertruck May Be Brilliant, Car Designer Says“The design will be questioned, but over time the specs will help win over pickup loyalists,” said analyst Ben Kallo of Robert W. Baird. “But the volumes are expected to be low, and the Model 3 and Model Y continue to be the focus.”(Updates with industry executive comment from eighth paragraph)\--With assistance from Thuy Ong, Natnicha Chuwiruch, Derek Wallbank and David Welch.To contact the reporters on this story: Dana Hull in San Francisco at dhull12@bloomberg.net;Ed Ludlow in San Francisco at eludlow2@bloomberg.netTo contact the editors responsible for this story: Chester Dawson at cdawson54@bloomberg.net, Ville HeiskanenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Will Best Buy's Q3 Report Give BBY Stock a Boost During the Holidays?

    Will Best Buy's Q3 Report Give BBY Stock a Boost During the Holidays?

    Best Buy (BBY) is set to report its Q3 performance before the market opens on Tuesday, November 26

  • Populism Is Being Driven by Automation

    Populism Is Being Driven by Automation

    (Bloomberg) -- Subscribe to What Goes Up on Apple PodcastsSubscribe to What Goes Up on Pocket CastsSubscribe to What Goes Up on SpotifyAs 2020 approaches, the financial industry is busy issuing global outlooks for the new year. Recession? Trade deal? Higher or lower bond yields? Wilmington Trust Corp. threw another major risk into the mix: the continued rise of populism.Luke Tilley, chief economist at Wilmington and a former adviser with the Federal Reserve Bank of Philadelphia, joins this week’s “What Goes Up’’ podcast to discuss how next year will accelerate the “tug of war” between “productivity, populism and portfolios.”“The rise of populism around the globe… at its core is the rise in productivity,” Tilley says. “Firms have turned to robotics and artificial intelligence—all kinds of technology that increases their productivity. And one of the outcomes is that less of income, less of GDP, is actually going to the worker,’’ he says. “That tends to produce populist sentiment.’’Also joining the show is Bloomberg’s Katherine Greifeld, who discusses the recent drop in bond yields and what’s arguably the most-boring foreign-exchange market since 1976.Mentioned in this podcast: Currency Doldrums Spur Complacency Risk That Could ‘Destroy Profits’ Bond Market’s Fate Hangs in Balance Before Trade-War Crunch TimeTo contact the authors of this story: Michael P. Regan in New York at mregan12@bloomberg.netSarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editor responsible for this story: Topher Forhecz at tforhecz@bloomberg.net, David RovellaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    David Einhorn Again Questions Tesla Accounts Receivable

    (Bloomberg) -- Short seller David Einhorn continued his long running war with Tesla Inc. Chief Executive Officer Elon Musk, saying he was “beginning to wonder whether your accounts receivable exist” and renewing a meeting request with the company’s chief financial officer.Einhorn’s hedge fund, Greenlight Capital, has lost money in recent months on its bet against Tesla shares, which have surged since the manufacturer reported a surprise third quarter profit in October. But the stock posted its biggest drop in nearly two months on Friday after Musk introduced a new pickup truck concept with a polarizing design.The well-known bear on Tesla’s stock said in a Twitter post he had yet to hear back from the electric automaker’s investor relations department more than a week after asking for an explanation about alleged discrepancies in its accounting practices. Einhorn also reiterated his call for a meeting with Tesla CFO Zach Kirkhorn and a tour of the company’s production facilities.Tesla did not immediately respond to a request for comment on Einhorn’s latest tweet.Einhorn’s social media salvo comes on a day when Tesla’s stock sank following the reveal late Thursday of a concept of its planned “Cybertruck” electric pickup. Tesla shares pared a drop of as much as 7% to trade down 6.1% to $333.28 as of 3:18 p.m. in New York.Musk, who has long warned of a “short burn,” taunted Einhorn earlier this month and said he read Greenlight Capital’s third-quarter investor letter that was critical of the carmaker.“It is understandable that you wish to save face with your investors, given the losses you suffered from Tesla’s successful third quarter,” Musk wrote. “You have our sympathies.”In August, Einhorn called on Musk to resign after Business Insider reported on “Project Titan,” the company’s internal effort to inspect all roofs that had solar panels and potentially faulty connectors in the wake of some rooftop solar fires. Last year, Musk sent Einhorn a pair of “short shorts.”Einhorn said on a Nov. 7 conference call that Greenlight remained short on Tesla, even though the position hurt its performance during the period. He added that he’d been surprised by the stock’s resilience, given “relentless negative news and what appears to be an end of the company’s growth trajectory,” according to a transcript.(Updates with details on short seller social media post from third paragraph)To contact the reporters on this story: Sam Mamudi in New York at smamudi@bloomberg.net;Dana Hull in San Francisco at dhull12@bloomberg.netTo contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, ;Chester Dawson at cdawson54@bloomberg.net, Brendan CaseFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 3 Tech Stocks for Growth Investors to Buy Now with Stock Market Near Highs

    3 Tech Stocks for Growth Investors to Buy Now with Stock Market Near Highs

    Let's dive into three tech stocks we found with our Zacks Stock Screener that growth investors might want to consider buying right now as the stock market remains near its new highs...

  • Bloomberg

    Google Workers Protest Company’s ‘Brute Force Intimidation’

    (Bloomberg) -- Google employees demonstrated outside the company’s San Francisco office Friday to protest the internet giant’s recent decision to put two staff members on leave.The event is the latest sign of a growing rift between management and rank-and-file workers at Alphabet Inc.’s Google, which was once praised for its open corporate culture. Protesting staff believe the company is trying to quell internal activism and quash dissension about Google’s work with the military and other potentially controversial customers.Roughly 200 workers gathered about 11 a.m. local time Friday outside a Google office overlooking San Francisco bay.“Over the past two years, many of my coworkers have asked the company to take meaningful action to curtail sexual harassment and systemic racism, improve the working conditions of temps, vendors and contractors, and divest from harmful tech,” said Zora Tung, a Google software engineer. “Instead of listening to us, the company has chosen to silence us.”The Google workers who protested also said the company had unjustly put Laurence Berland and Rebecca Rivers on indefinite administrative leave without warning. They demanded that Google bring the employees back to work immediately.Earlier this month, Bloomberg News reported that Google had put two workers on leave, which a spokeswoman said was for allegedly violating company policies. In an email, the Google protesters said neither Berland nor Rivers was given an explanation for their punishment. Rivers was involved in internal protests against U.S. Customs and Border Protection, which is currently testing a Google cloud product. Berland was active in protests against YouTube for its handling of hate speech policies.“It’s a brute force intimidation attempt to silence workers,“ the employees said in an email.Rivers said that Google’s official reason for putting her on leave was to investigate her document access at the company to ensure “everything’s on the up and up.”“However, many of the questions during this interrogation focused on my involvement in the Customs and Border Protection petition and social media usage,” Rivers said. “I helped my coworkers learn about and act on Google’s collaboration with CBP. Many of my coworkers are immigrants and this directly affects their lives and communities.”Berland said Google punished him for his involvement in protests against YouTube and for demanding, with other colleagues, that Google not work with the CBP.“Even though Rebecca and I are experiencing the full force of Google’s retaliation, this is not really about me. It’s not about Rebecca. It’s about us, all of us, and the open culture we built and treasure together,” Berland said. “If they can do this to me, they can do this to anyone, and that culture is lost forever.”A company spokeswoman said Google is investigating the access of confidential documents and other information that made some employees feel unsafe.“We have clear guidelines about appropriate conduct at work, and we’ve had a number of concerns raised,” the spokeswoman said. “We always investigate such issues thoroughly.”In the last 18 months or so, a divide has grown between Google’s leaders and outspoken staff. Employees have protested leadership’s handling of sexual harassment complaints and launched internal campaigns against some Google projects, such as a censored search engine for China, a military contract and Google’s cloud deals with energy companies. These areas were seen as potential sources of revenue growth for Google.More recently, some workers accused managers of attempting to censor internal discussions and shut down meetings about labor rights. At least some of the tensions stem from new community guidelines Google introduced in August that were intended to curb incivility in the workplace.Last week, Google scrapped its weekly all-hands staff meeting in favor of a monthly gathering that will focus on business and strategy topics.To contact the reporter on this story: Mark Bergen in San Francisco at mbergen10@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • StockBeat - Wall Street Throws Shade on Tesla's Cybertruck; Shares Sink

    StockBeat - Wall Street Throws Shade on Tesla's Cybertruck; Shares Sink

    Investing.com - Tesla’s electric pickup truck, the “Cybertruck,” seemed to have everything, with CEO Elon Musk claiming it is bulletproof car, can go from zero to 60 mph in about 2.9 seconds and tow up to 14,000 pounds. But those claims have come into question after its armored glass windows were surprisingly shattered in a demo, sending shares of the electric vehicle company sharply lower.

  • Bet on Brick-and-Click Retailing With These ETFs

    Bet on Brick-and-Click Retailing With These ETFs

    Forget pureplay online or offline retailing, a hybrid called brick-and-click retailing is gaining traction. Investors can tap the trend with these ETFs.