Raphael Stevens

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    Market turbulence will not impact Mediobanca deal, Monte dei Paschi CEO says

    Monte dei Paschi di Siena downplayed the potential impact of ongoing market turbulence on its 13-billion-euro offer for Mediobanca, telling CNBC it expects to complete the deal this summer.
    Analysts have been divided over the benefits of the deal, with some warning that there are limited synergies in combining two different banks.
    Acquiring Mediobanca will allow the world’s oldest bank to once again be a “protagonist” in a second round of consolidation, Monte dei Paschi CEO Luigi Lovaglio said.

    Siena, ITALY — Monte dei Paschi di Siena is holding firm on its plans to acquire Mediobanca for 13 billion euros ($14.3 billion) despite ongoing market turbulence, telling CNBC it will complete the deal in July.
    The world’s oldest bank still in operation, surprised investors in January by making an all-share offer for Mediobanca, a prestigious institution focused on wealth management and investment banking. Mediobanca has rejected the proposal, denouncing it as a “destructive” move that is devoid of financial rationale.

    Monte dei Paschi has faced several challenges over the years, most notably when it was bailed out by the Italian government in 2017 after it failed to raise much-needed cash from private investors. The Italian government has sold its majority stake in Monte dei Paschi and it currently represents less than 12% of ownership.
    The bank’s CEO Luigi Lovaglio told CNBC on Monday that Monte dei Paschi “is back” and “in control of our destiny.”
    When asked if the ongoing market turbulence could be a problem for its expansion plans, Lovaglio said: “The [market] situation will not impact our deal.”
    “On the opposite, [the market situation] is confirming that size matters, [it] is confirming that you need to diversify on revenues,” he said, adding that if they were already a combined entity, they would “be stronger” and “have capability to react much quicker.”
    The recent market volatility has led some companies to put some deals on hold. British private equity firm 3i Group Plc has reportedly postponed a sale of the maker of pet food MPM, while fintech company Klarna has put its IPO plans on hold.

    Analysts have been divided over the benefits of the deal between Monte dei Paschi and Mediobanca. Deutsche Bank, for instance, said in mid-March the market was ignoring some potential opportunities for Monte dei Paschi, including a bigger distribution policy.
    Other analysts warned about limited synergies in combining two different banks. Barclays, for example, said Monday that it was cutting its price target for Monte dei Paschi, taking a more skeptical view on the potential gains from a deal with Mediobanca. “Should Monte dei Paschi decide to spend more to convince majority of the Mediobanca institutional shareholders, the excess capital could reduce,” Barclays said.
    Speaking to CNBC, Lovaglio was adamant the offer for Mediobanca presents a “fair price” and did not comment on whether the company would sweeten the deal to make it more appealing for Mediobanca shareholders.
    “Hopefully within July, we can complete the deal,” he added.
    Amid a pullback in global equity markets on Monday, Monte dei Paschi and Mediobanca shares both closed around 5% lower. Since Monte dei Paschi announced its intention to buy Mediobanca on January 24, the latter’s shares have lost about 14% of their value and the former about 8.5%.

    Larger Ambitions

    Monte dei Paschi’s offer for Mediobanca came at a time of wider consolidation efforts in Italian banking. UniCredit announced last year an offer to buy rival Banco BPM for about 10 billion euros.
    Lovaglio said these bids represent the first wave of domestic consolidation for Italian banks.
    “I believe this is the first phase [of consolidation] and, probably, we will have a second phase two years from now. That’s why, by combining Monte [dei] Paschi with Mediobanca, we will be in a position to be again a protagonist,” Lovaglio said. More

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    GM reveals Corvette EV concept car as it reconfirms commitment to Europe

    General Motors revealed an all-electric Chevrolet Corvette concept car as part of the opening of a new design studio in England.
    The automaker said the car, which is a “design study” not intended to be a production model, is part of its “commitment to Europe.”

    An angle view of the new Chevrolet Corvette concept car.

    DETROIT — General Motors on Monday revealed a new all-electric Chevrolet Corvette concept car as part of the opening of a new design studio in England.
    The car features a sleek, aerodynamic exterior that resembles a futuristic IMSA race car more than a traditional Corvette, but it does pay some homage to the American sports car in featuring a split window design from the 1963 Sting Ray model, among other design elements.

    GM said the new concept — which is a “design study” not intended to be a production model — and design studio show the Detroit automaker’s continued “commitment to Europe as the company scales its Cadillac electric vehicle business there, while also preparing to launch Corvette sales” across the region.
    The Corvette concept and U.K. design center opening come at an inopportune time as the U.S. and the world’s largest automotive markets partake in a trade war with tariffs, including between America and Europe. 

    The front view of GM’s new Chevrolet Corvette concept car.

    GM is attempting to reenter Europe after selling off its Opel European division to then-PSA Groupe, now part of Stellantis, in 2017.
    Automakers routinely use concept vehicles to gauge customer interest, showcase future technologies and signal the direction of a vehicle or brand.
    GM said Monday the U.K. concept is part of a global design project involving multiple studios that will see additional Corvette concepts revealed throughout 2025. The carmaker has other design studios in or near Detroit; Los Angeles; Shanghai; and Seoul, South Korea.

    The side view of GM’s new Chevrolet Corvette concept car.

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    Where real danger might lurk in chaotic markets

    Plunging markets are normally unnerving because they reveal how quickly sober-minded investors can give in to terror. Just now the scariest thing is how rational those scrambling to sell appear. Share prices around the world have been cratering since Donald Trump announced his latest and biggest suite of tariffs on April 2nd. Although many market participants have held out hope that the new barriers would be swiftly lowered, perhaps after Mr Trump had used them to extract concessions from trading partners, it now looks increasingly likely that America’s president really means it. Indeed, on April 7th he announced additional tariffs of 50% on China, unless Xi Jinping withdraws his retaliatory levies. More

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    Restaurant stocks fall as investors fear recession, sales slowdown

    Restaurant stocks, from McDonald’s to Chipotle, fell as investors feared a coming recession.
    While President Donald Trump’s tariffs will not have much direct impact on eateries, another pullback in consumer spending would hurt restaurants.
    Fast-food chains have historically fared the best during economic downturns.

    Following announcements of layoffs, a Starbucks store is shown in Encinitas, California, U.S., February 24, 2025. REUTERS/Mike Blake
    Mike Blake | Reuters

    Restaurant stocks fell in morning trading Monday, fueled by investors’ fears that a recession is coming.
    U.S. stocks have tumbled for three consecutive days after President Donald Trump shocked the markets with high tariffs on goods imported from key trading partners. While analysts do not expect the tariffs to hit most restaurant companies directly, the inflation that is expected to follow would put pressure on consumers’ wallets and could lead to an economic downturn.

    “We view the direct cost impact of tariffs on restaurants as manageable, with a focus on select commodity costs, but see the bigger risk as incremental pressure on consumer spending and industry demand,” UBS analyst Dennis Geiger wrote in a note to clients on Monday.
    Investor concerns hit restaurant stocks across all sectors.
    Shares of Starbucks fell more than 2%, following a downgrade to neutral from Baird, citing near-term economic headwinds. The coffee chain, which is already attempting to turn around its U.S. business, has seen its stock sink nearly 20% since Trump unveiled the new tariffs.
    “Explanations for the drawdown we heard included higher coffee costs from tariffs, anti-American sentiment, and recession risk,” Bank of America Securities analyst Sara Senatore wrote in a research note on Saturday.
    Most of the world’s coffee is grown in an equatorial region that spans Latin America, the Asia-Pacific region and Africa known as the Coffee Belt. Last week, Trump slapped higher tariffs on key coffee exporters like Vietnam, Brazil and Switzerland, where beans are roasted. Like bananas and vanilla, coffee production cannot be easily shifted to the U.S. because of high domestic demand and climate limitations.

    Trade tensions also put Starbucks’ international sales at risk. Consumers in China, the company’s second-largest market, have boycotted Western brands previously for political reasons.

    A sign is posted in front of an Applebee’s restaurant on June 12, 2024 in Hayward, California.
    Justin Sullivan | Getty Images

    Casual dining chains also took a tumble. Shares of Dine Brands, which owns Applebee’s and IHOP, sank nearly 3%, while rivals Darden Restaurants and Texas Roadhouse dropped less than 1% and 2%, respectively.
    Fast-casual stocks, a recent favorite of investors, also slipped. Chipotle shares slid nearly 2%, Sweetgreen’s stock fell 1% and shares of Wingstop sank less than 1%.
    Fast-food stocks were not spared from Monday’s declines. Shares of McDonald’s, Restaurant Brands International and Yum Brands all dipped in morning trading.
    Historically, fast-food chains have fared the best during recessions as diners seeking cheap meals trade down from full-service or fast-casual eateries to McDonald’s or Taco Bell. But last year’s pullback in consumer spending saw fast-food eateries hit hard. Low-income consumers visited less frequently and pared back their orders, while consumers with higher incomes stuck to their usual dining habits, leading to same-store sales declines for quick-service restaurants.
    Few restaurant stocks were in the green. Shares of Dutch Bros., a fast-growing rival of Starbucks, rose more than 4% in afternoon trading after tumbling nearly 10% on Friday. Cava gained more than 6%.

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    Auto sales are on a ‘roller coaster ride’ as tariffs are expected to increase prices

    New and used vehicles prices are expected to rise amid auto tariffs, according to experts at Cox Automotive.
    The firm expects President Donald Trump’s 25% tariffs on imported vehicles and upcoming 25% levies on auto parts will add thousands of dollars to the costs of imported and domestic cars and trucks.
    While the tariffs do not directly impact used car sales, changes in new vehicle prices, production and demand affect the used car market, which is how the majority of Americans purchase a vehicle.

    A salesperson (left) shows vehicles to a shopper at a Toyota dealership.
    Getty Images

    DETROIT — Prices of new and used vehicles in the U.S. are expected to notably increase this year amid President Donald Trump’s 25% auto tariffs, according to a new analysis from industry experts at Cox Automotive.
    The automotive data and advisory firm expects the levies to add thousands of dollars to the costs of new cars and trucks — imported and domestic — while also driving up used car prices more than previously expected. Those prices increases are expected despite a potential slowdown in sales compared with prior expectations, the firm said.

    The new expectations come as the automotive industry responds to Trump’s 25% tariffs on imported vehicles that took effect Thursday, and ahead of additional 25% levies on auto parts that are expected to be implemented by May 3.
    “We expect to see declining discounting and then accelerated price increases as the tariffs are passed through and supply tightens, leading to price increases on all types of most new vehicles,” Cox Automotive Chief Economist Jonathan Smoke said during a virtual event Monday. “Over the longer term, we expect production sales to fall, newly used prices to increase, and some models to be eliminated.”
    Smoke described the current automotive market as a “roller coaster ride,” as demand ebbs and flows based on the country’s regulatory environment as well as economic uncertainty that’s impacting consumer purchases.
    Automakers have responded to the tariffs in a variety of ways. Manufacturers that are mostly domestic, such as Ford Motor and Chrysler parent Stellantis, have announced temporary deals for employee pricing, while others, such as British carmaker Jaguar Land Rover, have ceased U.S. shipments.  Hyundai Motor also has said it would not raise prices for at least two months to ease consumer concerns.
    Regarding new vehicles, Cox estimates a $6,000 increase to the cost of imported vehicles due to the 25% tariff on non-U.S. assembled vehicles, as well as a $3,600 increase to vehicles assembled in the U.S. due to upcoming 25% tariffs on automotive parts. Those are in addition to $300 to $500 increases as a result of previously announced tariffs on steel and aluminum.

    Automakers and suppliers may be able to bear some of the cost increases, but they’re also expected to pass them along to U.S. consumers, according to Wall Street analysts.
    While the tariffs do not directly impact used car sales, changes in new vehicle prices, production and demand affect the used car market, which is how the majority of Americans purchase a vehicle.
    Cox Automotive expects wholesale prices of used vehicles on its Manheim Used Vehicle Value Index — which tracks prices of used vehicles sold at its U.S. wholesale auctions — to now increase between 2.1% and 2.8% by the end of this year. That compares with a previous estimate of a relatively stable 1.4%.
    The average listing price of a used vehicle was about $25,000 as of mid-March, according to Cox, //right?// ahead of a significant sales uptick at the end of the month before potential pricing increases due to tariffs.
    Retail prices for consumers traditionally follow changes in wholesale prices, but they have not fallen as quickly as wholesale prices in recent years.
    “Expect to see some volatility in pricing over the year,” Jeremy Robb, Cox senior director of economic and industry insights, said during the virtual event. He noted the week after auto tariffs were confirmed might end up being this year’s peak in sales.
    The change in used vehicle pricing is expected to remain far less dramatic than the unprecedented increases the auto industry saw during the coronavirus pandemic, according to Cox. Those increases were led by robust consumer demand, low interest rates and a historically low availability in new vehicles due to parts and distribution issues.
    Ryan Rohrman, CEO of Indiana-based Rohrman Automotive Group, described the current used vehicle market for dealers as volatile, and even said it’s similar to the disruptions during the global health crisis.
    “We’re seeing our wholesale car count really go up, but the problem is we’re not able to get as many cars on the used car side as we’re retailing, and then that’s pushing us to go to the auctions. And that’s pushing the value of the cars at the block up, just like it did during Covid. That’s a scary thing,” said Rohrman, whose company specializes in new vehicle sales and select used cars
    While automakers are expected to cut production and some have decided to cease imports to the U.S. amid the tariffs, the actions are not expected to be as radical as they were in the early 2020s because of other market conditions.
    “It’s going to reduce the demand for vehicles, and it’s that demand component that I think really keeps the lid on from what we’re likely to see with used vehicle price appreciation,” Smoke said. More

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    JPMorgan CEO Jamie Dimon says Trump tariffs will boost inflation, slow an already weakening U.S. economy

    JPMorgan Chase CEO Jamie Dimon said tariffs announced by President Donald Trump will likely boost prices on both domestic and imported goods, weighing down a U.S. economy that had already been slowing.
    Dimon addressed the tariff policy in his annual shareholder letter.
    He’s the first CEO of a major Wall Street bank to publicly address Trump’s sweeping tariff policy as global markets tumble.
    “Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing,” Dimon said. “I am not so sure.”

    JPMorgan Chase CEO Jamie Dimon said Monday that tariffs announced by President Donald Trump last week will likely boost prices on both domestic and imported goods, weighing down a U.S. economy that had already been slowing.
    Dimon, 69, addressed the tariff policy Trump announced on April 2 in his annual shareholder letter, which has become a closely read screed on the state of the economy, proposals for the issues facing the U.S. and his take on effective management.

    “Whatever you think of the legitimate reasons for the newly announced tariffs – and, of course, there are some – or the long-term effect, good or bad, there are likely to be important short-term effects,” Dimon said. “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products.”
    “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he said.
    Dimon is the first CEO of a major Wall Street bank to publicly address Trump’s sweeping tariff policy as global markets tumble.
    Though the JPMorgan chairman has often used his platform to highlight geopolitical and financial risks he sees, this year’s letter comes at an unusually turbulent time. Stocks have been in freefall since Trump’s announcement shocked global markets, causing the worst week for U.S. equities since the outbreak of the Covid pandemic in 2020.
    His remarks appear to backtrack earlier comments he made in January, when Dimon said that people should “get over” tariff concerns because they were good for national security. At the time, tariff levels being discussed were far lower than what was unveiled last week.

    Trump’s tariff policy has created “many uncertainties,” including its impact on global capital flows and the dollar, the impact to corporate profits and the response from trading partners, Dimon said.
    “The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse,” he said. “In the short run, I see this as one large additional straw on the camel’s back.”

    ‘Not so sure’

    While the U.S. economy has performed well for the past few years, helped by nearly $11 trillion in government borrowing and spending, it was “already weakening” in recent weeks, even before Trump’s tariff announcement, according to Dimon. Inflation is likely to be stickier than many anticipate, meaning that interest rates could remain elevated even as the economy slows, he added.
    “The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility,” Dimon said.
    The JPMorgan CEO has been sounding a note of caution since at least 2022, when he said a “hurricane” was heading for the U.S. economy, thanks to the unwinding of Federal Reserve policies and the Ukraine war. But propped up by high government and consumer spending, the U.S. economy defied expectations until now. The election of Trump in November initially boosted hopes around what a pro-growth administration would do.
    Dimon struck a somewhat ominous note in his letter Monday, considering how much U.S. stocks have already fallen from their recent highs. According to the JPMorgan CEO, both stocks and credit spreads were still potentially too optimistic.
    “Markets still seem to be pricing assets with the assumption that we will continue to have a fairly soft landing,” Dimon said. “I am not so sure.”

    ‘Critical crossroads’

     Under Dimon’s roughly two decades of leadership, JPMorgan has become the largest U.S. bank by assets and market capitalization. Last year was its seventh in a row of record revenues, he noted.
    But the bank is reliant on “whether the long-term health of America, domestically, and the future of the free and democratic world are strong,” Dimon said. Both the U.S. and world are at a “critical crossroads,” he said.
    While the word “Trump” didn’t appear once in his 59-page letter, Dimon affirmed several of the president’s priorities, including immigration; addressing trade imbalances, especially with China; and deregulation.
    But Dimon argued for deep reform and strengthening of a global system that has led to decades of peace and prosperity, led by America since the end of World War II, rather than abandoning that order.
    “If given the opportunity, that is exactly what our adversaries want to happen: Tear asunder the extensive military and economic alliances that America and its allies have forged,” Dimon said.
    “In the multipolar world that follows, it will be every nation for itself – giving our adversaries the opportunity to set the rules and use military and economic coercion to get what they want.”
    Dimon had several prescriptions to meet the challenges of the day, including restoring civic pride, acknowledging and addressing problems including immigration and unfair trade policies with common sense, and maintaining the U.S. military “at whatever cost.”
    “Economics is the longtime glue, and America First is fine,” Dimon said, “as long as it doesn’t end up being America alone.”

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    Spirit Airlines CEO Ted Christie steps down

    Ted Christie, CEO of Spirit Airlines, is stepping down from his role.
    Spirit filed for bankruptcy protection in November after years of mounting losses, a failed merger, increased competition and more demanding consumer tastes.

    A Spirit Airlines aircraft prepares to depart from the Austin-Bergstrom International Airport on November 13, 2024 in Austin, Texas.
    Brandon Bell | Getty Images

    Ted Christie, CEO of Spirit Airlines, is stepping down from his role leading the embattled carrier, effective Monday, the company said.
    A group of several company executives — Chief Financial Officer Fred Cromer, Chief Operating Officer John Bendoraitis and General Counsel Thomas Canfield — has been tapped to lead the airline until a replacement is found.

    Christie had been president and CEO of Spirit since 2019 and saw the airline through the Covid pandemic.
    Spirit filed for bankruptcy protection in November after years of mounting losses, a failed merger, increased competition and more demanding consumer tastes.
    The budget carrier, which had reshaped the industry with its no-frills tickets, was the first major U.S. airline to file for Chapter 11 since 2011.
    The airline last month emerged from bankruptcy protection. More

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    Market carnage goes global

    DURING HIS inaugural address eight years ago, Donald Trump spoke of “American carnage”. In recent days he has spread something similar across the world economy: a problem he alone could fix, in his words, has become something he alone has globalised. More