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Toyota upset as US deems car imports national security threat; Tesla crashes 8%


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Toyota upset as US deems car imports national security threat; Tesla crashes 8%


* Toyota Motor Corp. said the White House's view that imported cars threaten national security is a sign that the Japanese carmaker is not welcome in the country. "[Toyota's] investments are not welcomed, and the contributions from each of our employees across America are not valued," the Japanese automaker said. The Trump administration postponed a decision on whether to slap tariffs on auto imports by 180 days to win more time for negotiations between Washington and some of its major trade partners. In a statement, the White House said the U.S. Commerce's report to Trump in February "concluded that imports of automobiles and certain automobile parts threaten to impair the national security of the United States."

* Tesla Inc. shares closed down 7.58% at $211.03 on May 17, marking a two-year low following reports that CEO Elon Musk and CFO Zachary Kirkhorn plan to oversee every expense and outgoing payment in a "hardcore" cost-cutting push. Tesla's stock has dropped 22.7% in May after it reported a $700 million loss for the first quarter. Despite completing a capital raise that reached $2.7 billion, Musk reportedly told employees in a companywide email that the company has 10 months to break even.


* India's Tata Motors Ltd. reported a 47% drop in quarterly profit as its British luxury car unit, Jaguar Land Rover Automotive PLC, struggled in key markets like China. Tata Motors reported 11.17 billion rupees in net profit for the fiscal fourth quarter ended March 31, versus 21.25 billion rupees a year earlier but above the estimated loss of 4.74 billion rupees, according to S&P Global Market Intelligence data. Revenue from JLR fell 5% to 651.46 billion rupees. JLR, however, swung to a pretax profit of £120 million after transformation costs in the fourth quarter after a loss-making third quarter.

* S&P Global Ratings revised its outlook on Nissan Motor Co. Ltd.'s long-term issuer credit rating to negative from stable, citing weakening profitability. It affirmed the automaker's A- long-term issuer credit and A-2 short-term ratings. The agency revised the outlook after the Japanese automaker reported a 57% year-over-year decline in net profit for fiscal 2018 and warned that it expects profit to almost halve again in fiscal 2019.

* Fitch affirmed its issuer default ratings of Ford Motor Co. and its financial arm, Ford Motor Credit Co., at BBB, but lowered the ratings outlook to negative from stable over weakened auto markets in Europe and China. Fitch also rated at BBB the U.S. carmaker's $2 billion revolving credit facility due 2022 and its $1.5 billion unsecured delayed draw term loan due 2022. Although the rating agency believes Ford's performance will improve after the restructuring, the carmaker remains exposed to an industrywide slowdown as it goes through a redesign.


* Electric pickup truck startup Rivian Automotive LLC unveiled its R1T vehicle, designed as an "adventure vehicle," featuring a 400-mile range and a 180-kWh battery pack. The R1T will retail at $69,000 before incentives in the U.S. and will be produced in 2020. Rivian, which received $500 million from Ford Motor Co., said the pickup featured a bed, tent, kitchen and storage tunnel.

* Volkswagen AG could build a line of low-budget small electric cars in Slovakia, German newspaper Handelsblatt reported. The carmaker could build the cars, which will retail at below €20,000 in its factory in Bratislava, where it produces its VW Up, Seat Mii and Skoda Citigo.

* Germany legalized battery-powered scooters, allowing users 14 years old and above to ride e-scooters on roads and biking paths, but not on sidewalks (or pavements, in British English), Euronews reported. Users of e-scooters must observe a 20 kilometer-per-hour speed limit. The country's legalization leaves the U.K. as the last country still banning electric scooters on roads.


* California Air Resources Board Chairman Mary Nichols said the state would have to sign "extreme" laws to combat a potential surge in pollution should President Donald Trump choose to loosen emissions and fuel economy standards, Bloomberg News reported. "If we lose the state vehicle standards, we have to fill up the gap with other measures," Nichols said, adding that California would take "dramatic alternatives" and enforce stronger controls, like taxes and bans.

* Fiat Chrysler Automobiles NV said it is recalling 208,000 minivans in North America as the affected vehicles risk losing power-assisted steering and engine stalling, the Associated Press reported. The recall will begin June 28 and will deal with faulty wiring harnesses, which could be contaminated with sealer, causing short-circuiting.

* Bayerische Motoren Werke AG issued a voluntary recall of approximately 106,182 X1 SUVs in the U.S. over concerns that the cars' B-pillars do not meet legal requirements, causing safety risk, according to documents from the National Highway Traffic Safety Administration. BMW of North America LLC will start recalling certain 2016-2019 X1 sDrive28i and X1 xDrive28i vehicles July 2. In the event of a crash, where the occupants head touches the B-pillar, the pillar may not absorb an adequate amount of the impact, increasing the risk of injuries.

* Ferrari NV's China arm will recall 2,071 imported vehicles as part of the worldwide recall of millions of Takata airbags, Xinhua News reported, citing the State Administration for Market Regulation.


* Michelin said its shareholders approved an increased annual dividend of €3.70 from €3.55 a year ago. The French tire-maker said the dividend is payable in cash starting May 23. In addition, Michelin confirmed its annual targets for 2019 following a 9.3% increase in sales in the first quarter to €5.8 billion. The increase was driven by strong contribution from its newly acquired businesses, Fenner PLC and Camso Inc. For 2019, the company said it forecasts segment operating income to exceed the 2018 figure of €2.77 billion at constant exchange rates and before the additional contribution of Fenner and Camso, which is estimated at €150 million for 2019.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng was down 0.57% to 27,787.61. The Nikkei 225 rose 0.24% to 21,301.73.

In Europe as of midday, the FTSE 100 was down 0.74% to 7,293.91, and the Euronext 100 was down 1.13% to 1,047.06.

On the macro front

Chicago Fed National Activity Index is due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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