Economy

NEW YORK (Reuters) -Ferrari will always make its luxury sports car in its hometown of Maranello, northern Italy, including its first fully electric model expected next year, Chief Executive Benedetto Vigna said on Tuesday.And this will not change, despite new tariffs potentially being introduced on international markets, including the U.S. following the election of Donald Trump as president.”We make cars in Maranello,” Vigna said at the Reuters NEXT conference in New York, replying to a question if Ferrari (NYSE:RACE) would ever consider manufacturing cars in the U.S.”We will sell cars in U.S., but we will make cars in Maranello.”Vigna said he did not anticipate any changes in demand as Trump will soon come into office. The president-elect has floated possible tariffs on European made goods.”Our order book is pretty strong,” Vigna said. “He decides what to do here, we will cope with those new rules… there will be tariffs for us, for everyone. It’s good because when you have the realities changing around you, it’s a way to foster more and more innovation.”Vigna, a former tech executive who took over as Ferrari CEO in 2021, reiterated on Tuesday the company would present its first fully-electric car in the fourth quarter of 2025.Asked about its selling price, which Reuters reported earlier this year it would top 500,000 euros ($526,000), Vigna said it would be set at the very last moment.”It depends on the emotion that we are able to transmit with the car,” he said.Ferrari last year started accepting payments for its luxury cars in cryptocurrencies, but the CEO said the company was not investing in them.”We wanted to provide the opportunity for clients … In any case, we get cash – dollar or euro depending on the country. We love cash,” Vigna said.”We don’t invest in crypto. We don’t want to get crypto and speculate – it’s a way to make purchase seamless.”Payments in cryptocurrencies started in the U.S. last year and are currently also accepted at some European dealerships, Vigna said.Vigna also said Ferrari was “very proud” of a deal it announced earlier on Tuesday, to supply engines and gearboxes to a new Cadillac Formula One team in a multi-year agreement from 2026 the company announced earlier on Tuesday.”We are very glad of this selection, and this makes us proud,” he said. “In our DNA is racing. We have been present in this sport, which is now becoming entertainment, since the beginning.”To view the live broadcast of the World Stage go to the Reuters NEXT news page: ($1 = 0.9499 euros) More

BEIJING (Reuters) -In one of their most dovish statements in more than a decade, Chinese leaders signalled on Monday they are ready to deploy whatever stimulus is needed to counter the impact of expected U.S. trade tariffs on next year’s economic growth.After a meeting of top Communist Party officials, the Politburo, officials said they would switch to an “appropriately loose” monetary policy stance, and “more proactive” fiscal levers.The previous “prudent” stance that the central bank had held for the past 14 years coincided with overall debt – including that of governments, households and companies – jumping more than 5 times. Gross domestic product (GDP) expanded roughly three times over the same period. The Politburo rarely details policy plans, but the shift in its message shows China is willing to go even deeper into debt, prioritising, at least in the near term, growth over financial risks. “From prudent to moderately loose is a big change,” said Shuang Ding, chief economist for Greater China and North Asia at Standard Chartered (OTC:SCBFF). “It leaves a lot of room for imagination.” Tang Yao, associate professor of applied economics at Peking University, says this policy reset is needed, because slower growth would make debt even more difficult to service.”They’ve by-and-large made peace with the fact that the debt-to-GDP ratio is going to rise further,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics, adding that this was no longer “a binding constraint.”It’s unclear how much monetary easing the central bank could deploy and how much more debt the finance ministry could issue next year. But analysts say that works in Beijing’s favour.U.S. President-elect Donald Trump returns to the White House in January, having threatened tariffs in excess of 60% on U.S. imports of Chinese goods. The timing and the ultimate level of the levies, which a Reuters poll last month predicted at nearly 40% initially, will determine Beijing’s response.”They are willing to do ‘whatever it takes’ to achieve the GDP target,” said Larry Hu, chief China economist at Macquarie.”But they will do so in a reactive way,” Hu said. “How much they will do in 2025 will depend on two things: their GDP target and the new U.S. tariffs.” Next (LON:NXT) year’s 2025 growth, budget deficit and other targets will be discussed – but not announced – in coming days at an annual meeting of Communist Party leaders, known as the Central Economic Work Conference (CEWC).Reuters reported last month that most government advisers recommend that Beijing should maintain a growth target of around 5%, even though that pace seemed difficult to reach throughout this year.The tone of the Politburo statement suggests that China won’t lower its growth ambitions for 2025, says Zong Liang, chief researcher at state-owned Bank of China. But it also suggests that China is likely to set an initial budget deficit target of around 4%, its highest ever.”Beijing may want to use the ‘around 5.0%’ growth target to show that it won’t cave to Trump’s threatened 60% tariff and other restrictive measures imposed on China,” said Ting Lu, chief China economist at Nomura, who also expects a 4% fiscal deficit, up from 3% in 2024.A one percentage point increase in the deficit amounts to additional stimulus of about 1.3 trillion yuan ($179.4 billion), but China can add to that if needed by issuing off-budget special bonds or allowing local governments to do so.Beijing is expected to gradually take on greater fiscal responsibility as local municipalities are too deep in debt.’NO.1 TASK’China is facing strong deflationary pressures as consumers feel less wealthy due to a prolonged property crisis and minimal social welfare. Low household demand is a key risk to growth.In an apparent nod to this risk, the Politburo pledged “unconventional counter-cyclical adjustments” and to “greatly boost consumption.”The new wording suggests the composition of stimulus “will likely differ substantially from past cycles, with more focus on consumption, high-tech manufacturing, and risk containment rather than traditional infrastructure and property investment,” Goldman Sachs analysts said in a note. Morgan Stanley (NYSE:MS) also read the statement as suggesting that elevating consumption will be “the No.1 key task for 2025,” but warned that “implementation remains uncertain.”China has issued increasingly forceful statements on boosting consumption throughout the year, but it has offered little in terms of policies apart from a subsidy scheme for purchases of cars, appliances and a few other goods.What else Beijing is prepared to do to boost consumption is another unknown. But demand-focused measures are key to improve the effectiveness of monetary policy easing in an economy that for decades has put production at its core.”Monetary easing in China is far less potent than it used to be,” said Julian Evans-Pritchard, an analyst at Capital Economics.”There is now limited appetite among households and large parts of the private sector to take on more debt, even at lower rates.”($1 = 7.2453 Chinese yuan renminbi)(Graphics by Kripa Jayaram; writing by Marius Zaharia; Editing by Kim Coghill) More

The development comes at a time when Lionsgate — which went public this year via a special purpose acquisition company — is facing corporate governance issues and box-office underperformance, including the recent flop of Megalopolis.”We always welcome the ideas and input of our shareholders,” a Lionsgate spokesperson told Reuters.Anson Funds did not immediately respond to a request for a comment.Gupta said that the studio behind The Hunger Games and John Wick is undervalued and should consider options after it completes a separation from the Starz cable and streaming service, Bloomberg added.Lionsgate would appeal as a takeover target to traditional and digital media companies, along with major technology and artificial intelligence players, the report said.It also added that Lionsgate could consider potential divestitures, including its unscripted television and 3 Arts businesses, according to Anson Funds. Anson has also suggested that Lionsgate should pursue alternative revenue streams, such as diving further into merchandising and events like Broadway shows, and improve its financial disclosures, Bloomberg said. More

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(Reuters) – A look at the day ahead in Asian markets. Investors go into Wednesday in a cautious frame of mind as they continue to digest the likely impact of China’s policy signal this week, and following a ‘risk off’ day that saw stocks fall and the dollar and bond yields rise. Asia’s economic calendar on Wednesday is light, with only Japanese producer inflation and South Korean unemployment figures on tap. Reserve Bank of Australia Deputy Governor Andrew Hauser also speaks, following the bank’s policy decision on Tuesday.With U.S. inflation figures to be released later on Wednesday after Asian markets close, potentially a key factor in whether the Fed cuts rates next week or not, investors may be inclined to hold the line and keep risk exposure to a minimum.Tuesday’s market moves would feed into that mindset. World stocks fell for a second day in a row, something that last happened a month ago, while the rise in bond yields and the dollar tightened financial conditions further.Investors may be extra sensitive to any rise in bond yields this week, as the U.S. Treasury sells $125 billion of notes and $85 billion of bills. Japanese government bond yields and the yen may also be sensitive to Wednesday’s producer price numbers from Japan, especially after the substantial upward revision to third quarter GDP growth on Monday.Meanwhile, investors and market watchers continue to try and figure out if Beijing’s historic shift in its monetary and fiscal policy stance this week will be matched by equally bold action. The economy certainly needs it. The latest trade figures on Tuesday were uniformly weak, with the near-4% year-on-year slump in imports last month particularly alarming. That was significantly worse than the bleakest forecast in a Reuters survey of 21 economists of a 3% decline, and highlights how brittle domestic demand is.The 10-year Chinese bond yield fell further on Tuesday to a new all-time low of 1.877%. It has fallen more than 15 basis points so far this month, on track for its steepest monthly fall since July 2021.Some analysts reckon the decline this week is a positive reaction to Beijing’s shift, as it shows investors are anticipating a significant loosening of monetary policy soon. There may be something to that, and substantial policy easing could indeed reflate growth and asset prices. But it’s hard to disentangle the move in yields from the latest trade and inflation data that are a reminder of just how heavy the deflationary and weak demand pressures bearing down on the economy actually are.The Indian rupee, meanwhile, is anchored at a record low, with rate cut hopes rising after the government named career civil servant Sanjay Malhotra to replace outgoing Reserve Bank of India (NS:BOI) Governor Shaktikanta Das.Here are key developments that could provide more direction to markets on Wednesday:- South Korea unemployment (November)- RBA Deputy Governor Andrew Hauser speaks- Japan producer inflation (November) More

The consumer price index is expected to show a 2.7% 12-month inflation rate for November, up one-tenth of a percentage point from October. Core CPI is forecast at 3.3%, or unchanged from October.
Traders in futures markets nevertheless are placing huge odds that policymakers again will cut their benchmark short-term borrowing rate by a quarter of a percentage point.
The report will be released Wednesday at 8:30 a.m. ET.

A man shops at a Target store in Chicago on November 26, 2024.
Kamil Krzaczynski | AFP | Getty Images

A key economic report coming Wednesday is expected to show that progress has stalled in bringing down the inflation rate, though not so much that the Federal Reserve won’t lower interest rates next week.
The consumer price index, a broad measure of goods and services costs across the U.S. economy, is expected to show a 2.7% 12-month inflation rate for November, which would mark a 0.1 percentage point acceleration from the previous month, according to the Dow Jones consensus.

Excluding food and energy, so-called core inflation is forecast at 3.3%, or unchanged from October. Both measures are projected to show 0.3% monthly increases.

With the Fed targeting annual inflation at 2%, the report will provide more evidence that the high cost of living remains very much a fact of life for U.S. households.
“Looking at these measures, there’s nothing in there that says the inflation dragon has been slain,” said Dan North, senior economist at Allianz Trade Americas. “Inflation is still here, and it doesn’t show any convincing moves towards 2%.”
Along with the read Wednesday on consumer prices, the Bureau of Labor Statistics on Thursday will release its producer price index, a gauge of wholesale prices that is projected to show a 0.2% monthly gain.

Halting progress, but more cuts

To be sure, inflation has moved down considerably from its CPI cycle peak around 9% in June 2022. However, the cumulative impact of price increases has been a burden to consumers, particularly those at the lower end of the wage scale. Core CPI has been drifting higher since July after showing a steady series of declines.

Still, traders in futures markets are placing huge odds that policymakers again will cut their benchmark short-term borrowing rate by a quarter of a percentage point when the Federal Open Market Committee concludes its meeting Dec. 18. Odds of a cut were near 88% on Tuesday morning, according to the CME Group’s FedWatch measure.

“When the market is locked in like where it is today, the Fed doesn’t want to make a big surprise,” North said. “So unless something has skyrocketed that we haven’t foreseen, I’m pretty sure the Fed is on a lock here.”
The CPI increase for November likely came from a few key areas, according to Goldman Sachs.
Car prices are expected to show a 2% monthly increase, while air fares are seen as 1% higher, the firm’s economists projected in a note. In addition, the nettlesome increase in auto insurance is likely to continue, rising 0.5% in November after posting a 14% increase over the past year, Goldman estimated.

More trouble ahead

While the firm sees “further disinflation in the pipeline over the next year” from easing in the autos and housing rental categories, as well as softening in the labor markets, it also worries that President-elect Donald Trump’s planned tariffs could keep inflation elevated in 2025.
Goldman projects core CPI inflation will soften, but just to 2.7% next year, while the Fed’s target inflation gauge, the personal consumption expenditures price index, will move to 2.4% on the core reading from its most recent 2.8% level.
With inflation projected to run well above 2% and macro economic growth still running near 3%, this wouldn’t normally be an environment in which the Fed would be cutting. The Fed uses higher interest rates to curb demand, which theoretically would force businesses to lower prices.
Markets expect the Fed to skip the January meeting then possibly cut again in March. From there, market pricing is for only one or at most two cuts through the rest of 2025.
“Two percent to me doesn’t mean just touching 2% and bouncing along. It means hitting 2% for a continuous, foreseeable future, and none of that is evident in any of those reports,” North said. “You don’t really want to cut in that environment.” More

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The Bureau of Labor Statistics, which tracks jobs and inflation, issued a report on what caused embarrassing episodes in which data was released improperly.Outdated technology, inadequate funding and a failure to follow established procedures contributed to embarrassing missteps at the Bureau of Labor Statistics this year, a panel that examined the episodes said on Tuesday.Julie Su, the acting labor secretary, formed the 11-member group in September after a botched data release allowed some investors to see potentially market-moving employment data before the public. That followed two other episodes: one in February, in which an agency employee provided methodological information to finance industry “super users”; and another, in May, in which inflation data was inadvertently posted to the agency’s website half an hour before its scheduled release.The panel was chaired by a former Labor Department official and consisted mostly of current officials from the department and other federal agencies. It also included two members of the public. Ms. Su gave the group 60 days to “identify causes of and fixes to the inaccurate release of data” and report back.The panel found that the three episodes were “unique and unrelated,” and noted that none of them related to the quality or accuracy of the agency’s data. But it argued that even the perception that the agency was poorly run, or that favored groups had early access to information, threatened to erode public trust in government data.“The smallest glitch can undermine months of high-quality data work in a moment,” the panel wrote in its report.Erika McEntarfer, the commissioner of the Bureau of Labor Statistics, echoed that message in a call with reporters on Tuesday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More