Key Takeaways
- Elon Musk dismissed reports that Tesla (TSLA) is considering selling its China operations to facilitate a merger with SpaceX, calling the claims "fake news."
- Piper Sandler lowered price targets for Reddit (RDDT) to $195 and Stryker (SYK) to $390, citing updated margin and earnings estimates.
- Japan's 2-year JGB yield climbed to 1.5%, its highest level in over 30 years, as investors bet on more aggressive Bank of Japan rate hikes.
- China’s Ministry of Finance announced a 100 billion yuan reopening of 7-year bonds scheduled for August 7 to support domestic liquidity.
- A major Wildberries logistics center in Volgograd, Russia, was hit by an overnight attack, causing a massive fire and the suspension of regional operations.
Musk Denies Tesla-China Divestiture for SpaceX Merger
Elon Musk has flatly rejected a Wall Street Journal report suggesting Tesla (TSLA) executives were preparing to separate the company's China business. The report claimed the move was intended to clear regulatory hurdles for a potential merger with SpaceX.
The Shanghai Gigafactory remains Tesla's most productive facility, accounting for more than 50% of its global deliveries. Musk’s denial stabilized market expectations, though prediction markets still place a 25.5% probability on a Tesla-SpaceX combination by year-end.
Piper Sandler Trims Targets for Reddit and Stryker
Piper Sandler adjusted its outlook on two major U.S. equities on Friday. The firm cut its price target for Reddit (RDDT) to $195 from $215, despite the social media platform's recent 69% revenue growth.
The firm also reduced its forecast for medical technology giant Stryker (SYK), lowering the target to $390. Analysts cited a "line-by-line" review of recent financial filings, leading to more conservative 2026 and 2027 earnings estimates based on shifting margin assumptions.
JGB Yields Hit 31-Year Highs Amid BOJ Hawkishness
The yield on Japan's 2-year government bond (JGB) rose 0.5 basis points to reach 1.5%, a level not seen since May 1995. This move reflects growing market conviction that the Bank of Japan will accelerate interest rate hikes to combat yen weakness.
Swap markets are currently pricing in an 80% chance of a rate increase to 1.25% by October. The rise in short-term yields followed a period of intense volatility in the currency markets and rising domestic inflation concerns.
Global Supply Chain and Fiscal Developments
In Russia, the e-commerce giant Wildberries saw its 44,000-square-meter logistics hub in Volgograd engulfed in flames following a drone attack. The company has declared force majeure and evacuated all employees, marking the latest in a series of strikes targeting Russian infrastructure.
Meanwhile, China's Ministry of Finance is moving to bolster its debt market. The ministry announced it will reopen 100 billion yuan ($13.8 billion) in 7-year treasury bonds on August 7. This follows a surge in Panda bond issuance, which rose 69% in the first half of the year as Beijing seeks to expand the global role of the yuan.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.