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Update on the latest in business:

December 19, 2018

FINANCIAL MARKETS

Stocks mixed in Asia on Fed rate decision, Japanese data

SINGAPORE (AP) — Asian stocks were mixed today as traders mulled over the Federal Reserve’s interest rate decision and weaker-than-expected Japanese trade data.

Japan’s Nikkei 225 index fell 0.6 percent while South Korea’s Kospi rose 0.8 percent. Hong Kong’s Hang Seng was flat. The Shanghai Composite index shed 0.8 percent. Australia’s S&P ASX 200 gave up 0.2 percent. Shares were higher in Taiwan and Southeast Asia.

Yesterday on Wall Street, most indexes broke a two-day losing streak as technology and consumer-focused companies climbed. Energy stocks plummeted along with crude oil, which reached its lowest price since August 2017. The broad S&P 500 index added 0.22 points to 2,546.16. The Dow Jones Industrial Average gained 0.4 percent to 23,675.64 and the Nasdaq composite was up 0.4 percent at 6,783.91. The Russell 2000 index of smaller company stocks lost 0.1 percent to 1,377.18. The index is 21 percent off its peak set in August, past a level the Wall Street terms a “bear market.”

ECONOMY-FALLING STOCK MARKET

Stock market woes raise a nagging fear: Is a recession near?

BALTIMORE (AP) — Fears of a recession have been mounting with the U.S. stock market appearing to be headed for its worst December since 1931 — during the Great Depression.

Wall Street’s sustained slump has been fueled by investor concerns about lower corporate profits, higher corporate debt, a festering trade war between the United States and China and a broader global slowdown.

So is a U.S. recession imminent?

Not necessarily.

Plenty of economic gauges suggest that far from being derailed by a stock market that’s set to suffer its first annual loss in a decade, the $20 trillion U.S. economy is barreling forward. Employers are hiring, consumers are spending ahead of the holidays and economic growth has been brisk, thanks in part to President Donald Trump’s deficit-financed tax cuts.

BREXIT-BUSINESS

UK business groups plead for deal to prevent no-deal Brexit

LONDON (AP) — Britain’s five leading business groups are pleading with the government to act to prevent the country’s departure from the European Union without a deal.

In an unusual expression of unity, the groups that represent hundreds of thousands of businesses employing millions told the nation’s leaders to put their political party affiliations aside and prevent a so-called “no deal” Brexit.

The statement says “businesses have been watching in horror as politicians have focused on factional disputes rather than practical steps that business needs to move forward. The lack of progress ... means that the risk of a ‘no-deal’ Brexit is rising.”

The statement was signed by the British Chambers of Commerce, the Confederation of British Industry, the manufacturers’ organization called EEF, the Federation of Small Businesses and the Institute of Directors.

VOLKSWAGEN-EMMISSIONS SCANDAL

US: German company to plead guilty in VW emissions scheme

DETROIT (AP) — U.S. authorities say a German engineering company has agreed to plead guilty and pay $35 million for its role in the Volkswagen vehicle emissions scandal.

The Justice Department said Tuesday that IAV has agreed to plead guilty to conspiracy in Detroit federal court on Jan. 18. The government says IAV misled regulators about whether certain VW and Audi vehicles met pollution standards.

The diesel vehicles were programmed to trigger certain pollution results only during testing, not during regular road use. The scheme affected nearly 600,000 vehicles.

An email seeking comment was sent to IAV.

In a court filing, the government says IAV engineers traveled to a California test facility in 2006 and 2007 to evaluate whether the “defeat device software” was working. VW pleaded guilty in 2017.

JAPAN-SOFTBANK IPO

SoftBank’s mobile unit begins trading in 1 of biggest IPOs

TOKYO (AP) —SoftBank Group Corp.’s Japanese mobile subsidiary suffered a bitter debut on the Tokyo Stock Exchange today, slumping 15 percent, hurt by a recent service outage and concerns about the use of parts from Chinese telecom Huawei.

Shares fetched an opening price of 1,463 yen ($13.03) and slid further to end their first day at 1,282 yen ($11), down 15 percent from the IPO price of 1,500 yen announced earlier this month.

Company president Ken Miyauchi and four other executives each rang a bell with a wooden hammer at a festive ceremony celebrating the IPO that sought to raise more than 2 trillion yen ($18 billion).

SoftBank was listing more than 1.7 billion shares, or about one third held by its parent company. Kyodo News reports that based on the opening price, the company raised 2.6 trillion yen ($23 billion), the record amount for an IPO on the Tokyo burse.

VENEZUELA-DEFAULT LAWSUIT

Trust for US bondholders sues Venezuela over defaulted debt

CARACAS, Venezuela (AP) — A trust representing holders of Venezuelan bonds has gone to New York federal court demanding payment on more than $34 million in unpaid debt.

The lawsuit filed Tuesday is believed to be the first by a long list of investors not being paid by Venezuela’s socialist government as it confronts a cash crunch worsened by hyperinflation and collapsing oil production.

It was filed by Florida-registered Casa Express Corp., which says it represents investors in dollar-denominated bonds issued in 1998 and 2002.

Last year Venezuela stopped paying interest on $65 billion in bonds issued by the government and state oil company PDVSA. Creditors had been reluctant to sue for fear of racking up huge legal fees with no repayment scenario in sight as long as President Nicolas Maduro remains in power.

PRADA-BLACKFACE

Prada withdraws luxury trinkets over blackface controversy

NEW YORK (AP) — Prada is no longer selling a line of accessories and displays following complaints they featured blackface-style imagery.

The controversy began last week when a New Yorker complained in a viral Facebook posting after walking past a Prada boutique in Manhattan’s SoHo district and noticing what she described as a “racist and denigrating” caricature in the storefront.

The Italian fashion house had recently launched a series of luxury keychains and trinkets, including one showing a character with brown skin and exaggerated red lips.

Prada Group released a statement saying that it “abhors all forms of racism” and that the imaginary creatures were not intended to “have any reference to the real world and certainly not blackface.”

ELON MUSK-TUNNEL

Elon Musk allows rides on underground tunnel

LOS ANGELES (AP) — Elon Musk has unveiled his underground transportation tunnel, allowing invited guests to take some of the first rides ever on the tech entrepreneur’s solution to “soul-destroying traffic.”

Guests boarded Musk’s Tesla Model S and were driven on Los Angeles-area surface streets about a mile away to what’s known as O’Leary Station on Tuesday.

The station sits smack dab in the middle of a residential neighborhood. It consists of a wall-less elevator that slowly took the car down a wide shaft, roughly 30 feet below the surface.

Reporters described the rides as bumpy but impressive. At least one experienced motion sickness while another yelled, “Woo!”

The tunnel, meant to be a “proof of concept,” runs just over a mile under Musk’s SpaceX headquarters in Hawthorne.