SpaceX chief Elon Musk answers questions after the 2019 SpaceX Hyperloop Pod competition at the SpaceX headquarters in Los Angeles on July 21, 2019.
MARK RALSTON | AFP | Getty Images
In a not so humble brag on Wednesday night, Tesla boasted that it beat the record for the fastest four-door sedan at Laguna Seca, the famed race track in Monterey, California.
The company drove the lap with a new, prototype version of its pure battery electric sedan, the Model S, one with 3 motors and a new ‘Plaid’ powertrain.
The company’s official Twitter account crowed: “We lapped Laguna Seca @WeatherTechRcwy in 1:36.555 during advanced R&D testing of our Model S Plaid powertrain and chassis prototype (That’s a second faster than the record for a four-door sedan)”
The next closest record for a four-door was set by a 2016 Cadillac CTSV back in 2015.
A video that Tesla shared showed a driver taking a lap at Laguna Seca, going at a maximum speed of apparently 129 miles per hour, but at lower speeds on trickier “corkscrew” stretches of the track. Tesla did not disclose the name of the person behind the wheel, but said in a subsequent tweet that they were “A member of the Tesla development team (amateur driver).”
Elon Musk touted the lap as a “record” in an earlier tweet. He wrote on Tuesday: “Model S just set record for fastest 4 door ever at Laguna Seca, video tmrw.”
But a spokesperson for Laguna Seca wrote in an e-mail to CNBC: “We were not officiating while the Tesla was testing on the track. Official records only happen during sanctioned events where a sanctioning body is officiating.”
Tesla said it had no further information to offer about the Laguna Seca lap at this time.
The Plaid powertrain will eventually be included in future versions of Tesla’s Model S, Model X and Roadster vehicles, but not its Model 3 or Model Y, according to CEO Elon Musk. He revealed that information, as well as vague pricing details, while chatting up his followers and fans on the social network, also on Wednesday night.
Specifically, Musk wrote: “Yes. To be clear, Plaid powertrain is about a year away from production & applies to S,X & Roadster, but not 3 or Y. Will cost more than our current offerings, but less than competitors.” Answering questions from fans and followers on Twitter, Musk also revealed that the company plans to offer its Plaid powertrain for both “base” and the more expensive “founders series” versions of the new version of the Roadster.
Last week, Musk said he would send a Model S to Nürburgring, referring to a famously challenging track there, the Nordschleife a.k.a. “Green Hell.” That promise implied that Musk believes the Model S can best Porsche’s new battery electric offering, the Taycan, on its home turf.
After a few mocking comments about the Taycan, upon its debut, Musk did eventually tip his hat, writing that the Porsche EV seems like a good car, and had made great time at Nürburgring.
Since Musk threw out the Model S challenge, Nico Rosberg — the pro race car driver — publicly offered his services for the eventual record attempt in what is expected to be a tuned and modified version of the Model S.
Japan unveils $120 billion fiscal package to shore up growth
Japanese PM Shinzo Abe during his meeting with Danish PM Lars Loekke Rasmussen on July 10, 2017 in Copenhagen, Denmark.
Ole Jensen – Corbis | Getty Images
Japan unveiled a $120 billion fiscal package on Thursday to support stalling growth in the world’s third-largest economy amid offshore risks and as policymakers look to sustain activity beyond the 2020 Tokyo Olympics.
Prime Minister Shinzo Abe announced the 13 trillion yen ($119.7 billion) package on Thursday, the size of which had been reported previously. The government is expected to announce further details of the package later in the day after the cabinet has approved it.
“We managed to compile a strong policy package,” Abe told a gathering of ruling party lawmakers and government officials on Thursday.
“It’s based on three pillars of ensuring disaster rebuilding and safety, providing intensive support to overcome downside economic risks and sustaining economic vitality after the Tokyo Olympics,” he added.
The economic package amounts to 25 trillion yen ($230 billion) when government loans, credit guarantees and private-sector spending are included, sources have told Reuters this week.
Japan’s economy ground to a near halt in July-September as the global slowdown knocked exports. Retail sales also tumbled at their fastest pace in more than 4-1/2 years in October as a sales tax hike prompted shoppers to tighten their purse strings.
“Fiscal policy is a smart thing to do right now particularly because there really isn’t much opportunity for any monetary policy movement given that there just isn’t any space on the monetary policy side,” said Moody’s Analytics economist Steve Cochrane before Abe’s announcement.
“If it’s infrastructure spending or spending on education and training for either young people or retraining the older generation that is staying in the labour force longer – these are activities that would provide near-term juice for the economy but maybe have long-term impact as well,” Cochrane added.
In compiling the package, Japan’s heavily indebted government will tap stretched fiscal space to combat overseas risks and the impact of a sales tax hike.
The 13 trillion yen includes more than 3 trillion yen from fiscal investment and loan programmes, as the heavily indebted government seeks to take advantage of low borrowing costs under the central bank’s negative interest rate policy.
The spending will spread over a supplementary budget for this fiscal year to March and an annual budget for the coming fiscal year from April, both to be compiled later this month.
“Rather than pushing up the economy, we see it as easing negative factors,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
The stimulus package is smaller than the last major package compiled in 2016, worth 28 trillion yen, when the Brexit vote darkened the Japan’s export outlook.
To strike the balance between spurring growth and maintaining fiscal discipline, Tokyo will steer clear of fresh deficit-covering bond issuance, the Nikkei business daily reported this week.
BlackRock bets on Asia telecom for 2020, says sector may see 5G boost
A 5G communication technology booth at the China International Import Expo on November 7, 2018 in Shanghai, China.
Wang Qiming | Visual China Group | Getty Images
Telecommunications stocks in Asia could be the next area of opportunity for investors in 2020, according to BlackRock.
Turning the spotlight on the sector in its outlook report for 2020, BlackRock’s head of global emerging markets equities Andrew Swan wrote: “We have bought telecom stocks we had not touched in years … A typical BlackRock Asian equity portfolio exposure to telecom is now in the high single digits.”
The asset manager says telco stocks will prove resilient and expects the group to meet or even “modestly best” earnings expectations.
Swan said BlackRock sees “greater than market returns” for those stocks.
“We see continuing macro weakness and with that earnings risk in the broader market. In this environment Telecom stocks provide earnings resilience especially where they have the ability to fend off pricing competition or benefit from growth initiatives in 5G,” he wrote in an email to CNBC.
Many operators are likely to focus on cost-cutting in 2020, via measures such as asset sales and network-sharing, according to a Economist Intelligent Unit report on Wednesday.
Raising cash will be the main goal, but telcos will also be trying to revive their average revenue per user numbers, which has stagnated for years in many markets, said the report.
Australia retail sales stagnate, exports skid in October
People walk past the Myer Christmas window display as they do their shopping on December 20, 2012 in Melbourne, Australia.
Scott Barbour | Getty Images
Australian retailers had it tough in October as skittish consumers chose to hoard any windfall from lower interest rates and tax rebates, likely heralding another quarter of disappointment for the economy.
Data out on Thursday also showed the country’s trade surplus shrank by a third in October as resource exports came off the boil, a worrying turn for what has been a vital prop to growth.
Extending a spate of soft reports, retail sales were flat in October at A$27.6 billion ($18.73 billion) when analysts had looked for a 0.3% gain. Clothing, home wares and department stores all saw declines in the month.
The sector had already suffered its worst 12-month stretch since the 1991 recession as shoppers struggled with stagnant wages and sky-high debt.
The dire result was particularly telling as the Reserve Bank of Australia (RBA) had cut interest rates to a record low of 0.75% in early October, its third easing since June.
Neither were government giveaways providing much impetus with billions in tax rebates being saved rather than spent.
That is becoming an increasing headache for Prime Minster Scott Morrison given he won re-election in May on a pledge the economy would always be stronger under his guidance.
“The spending ‘strike’ of Q3 looks to have extended into early Q4 with still no evidence of a boost from tax refunds or rate cuts – the combined value of which will be adding around $16.6 billion to household disposable incomes over the year to June 2020,” said Westpac senior economist Matthew Hassan.
Investors are wagering policy makers will have to do a whole lot more to revive spending and futures are fully priced for a rate cut to 0.5% by April <0#YIB:>, with a real chance of a move to 0.25% by late 2020.
Not so merry Christmas
Weakness in household consumption was the main reason gross domestic production (GDP) managed only a modest 0.4% gain in the third quarter, and this quarter was looking no better.
There was anecdotal evidence that retailers fared well in November’s Black Friday and Cyber Monday sales, yet history suggests these merely pull spending forward from Christmas.
Adelaide Timbrell, an economist at ANZ, noted the sales surge that used to come in Christmas has been on the wane.
“The growth of online retail and, in particular, heavy discounting coming into the Christmas season may be behind the weakening effect, which has seen a particular downward trend in the last 10-12 years,” she said.
“The rising intensity of competition for the Christmas Dollar, means stabilization isn’t expected in the short term.”
While retailers were struggling, Australia’s exporters have never had it so good thanks to high prices for key resources and strong Asian demand in the tourist and education sectors.
Yet even they hit a bump in October as a 5% drop in exports shrank the country’s trade surplus by a third to A$4.5 billion.
Iron ore alone dropped A$1.2 billion as prices retreated from their highs after supply disruptions in Brazil caused a spike in the first half of the year.
Gold exports fell another A$666 million, though this is a volatile component as shipments vary widely month to month.
“The first look at Australia’s external performance for Q4 suggests the era of very large trade surpluses could be behind us,” said CBA economist Belinda Allen.
“Commodity prices were lower in both October and November, and as a result there are downside risks to export values in coming months.”
($1 = 1.4736 Australian dollars)
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