Fiat withdrew from the merger deal with Renault

The Italian automaker Fiat Chrysler (FCA) withdrew from the merger deal with the French Renault (RNO). According to the company info, the merger proposal was rejected by the French government, which owns 15 % of Renault.

If the 35 billion euros merger would have continued, the companies would have created the world’s third largest car manufacturer. Shares of Nissan´s and Renault alliance partner Mitsubishi Motors fell in Tokyo today, while Fiat closed yesterday down 3,3 % to 12,75 dollars in New York. Renault traded yesterday down 0,65 % to 56,20 dollars in Paris.

Business Finance

Stocks markets rally – rate cut & QE possible

The stock markets rallied on Tuesday, when Federal Reserves Chairman Jerome Powell signalled a possible interest rate cut if needed. He was referring to the trade negotiations between the China and US. Also some markets estimates that the ECB, The European Central Bank, would start again the quantitative easing actions from January, lifted the trade worries.

Dow Jones index ended up 2,06 % to 25 332 points, S&P 500 index ended up 2,14 % to 2803 points and the technology-index Nasdaq closed up 2,65 % to 7527 points. According to Bloomberg News, this increase was the biggest since January.

The big banks and the car manufacturers were the leading sectors. The economic slowdown due to the trade tariffs between the China and US has been pushing the stocks downward trend.

The recent IPO-companies were mixed, the Uber (UBER) closed up 3,64 % to 42,53 dollars, while Lyft (LYFT) closed down 0,62 % to 59 dollars. The market speculation which of the new companies would power the better way to autonomous future continued. The electric car manufacturer Tesla (TSLA) closed up 8,17 % to 194,50 dollars.

From the financial markets side, Goldman Sachs (GS) ended up 3,65 % to 190,40 dollars and JP Morgan (JPM) closed up 3,08 % to 109,77 dollars.

The global economic situation was also in the World Bank´s new economic estimate on Tuesday, that the global economy is decreasing next year due to the trade situation. -Global economic growth is forecast to ease to a weaker-than-expected 2.6% in 2019 before inching up to 2.7% in 2020, the World Bank says.

The Dutch banking group ABN Amro said in their review that they expect the European Central Bank to start the quantitative easing program again in January 2020. They expect the buying of bonds start from 70 billion euros next year and that the ECB would need to rise the issuer limit from 33 % to as high as 50 %.

It is expected that this new policy decision will be given to the new ECB president, which is going to be elected during this year as part of the EU top jobs puzzle. Mr Mario Draghi is leaving the central bank during this year. The ECB is having its next Governing Council meeting on Thursday in Vilnius, Lithuania.

In Europe, the stocks ended also up and the FTSE 100 index closed up 0,41 % to 7214 points in London. In Germany the DAX-index closed up 1,51 % to 11971 points and in France the CAC 40 index ended up 0,51 % to 5268 points.

The euro was trading flat at 1,125 dollars and the sterling was up 0,01 % to 1,2699 dollars.

Business Finance

US-UK trade deal on the agenda

The US and UK have been discussing about the trade deal between the countries after the Brexit deal, which is estimated to happen latest October 31st. This is part of the state visit of the US President Donald Trump and the UK royal family & Government.

According to the news conference on Tuesday, Mr Donald Trump said that the US-UK trade deal would have “tremendous potential” and coverage, even maybe the health care system NHS.

He also mentioned that the UK Brexit deal with the EU countries “will happen and should happen” and that it is important to deliver the Brexit. The US is offering the UK a broad free-trade agreement once the country has left the EU.

The UK Prime Minister Theresa May said also in the news conference that the UK should deliver the Brexit deal as the Goverment has been negotiated and that it is now the duty of the UK Parliament.

Mrs May is leaving the Downing Street 10 on Friday and the next Prime Minister will be chosen by the Conservatives during the summer time, maybe in July in the UK.

Business Finance

Axel Springer and KKR in privatization talks

One of the European leading media companies, the German Axel Springer (SPR) is in talks with the US private-equity company KKR. According to Bloomberg and Wall Street Journal, the topic has been the privatization.

According to the sources,  the founders are not selling their ownership, but it may be a question of a public tender offer to other Axel Springer´s shareholders.

After the company announcement on Wednesday evening, the shares of Axel Springer rose over 20 % to 54,50 euros yesterday on Thursday trading. Today on Friday the shares were up by 0,46 % to 55,15 euros in Frankfurt.

Business Finance

Swiss Watch export value nearly 1,8 billion francs in April

The Swiss Watch export was totally 1775 million francs in April. According to Federation of Swiss Watch Industry the main export countries (HongKong, USA, Japan, China, Singapore and Germany) totalled 932 million francs, up 6,2 %.

– All segments below 3,000 francs (export price) saw steep declines. The reduction in the number of timepieces priced below 200 francs was -23.6%. Watches priced over 3,000 francs remained positive, helping to stabilise the trend in export turnover, the organisation stated in the press release.

The export countries were mixed during the period, while the strongest growth was in the US (+16,8%), Japan (21,2%) and Singapore (18,8%).

– The situation in Europe (-4.3%) was more mixed, with the United Kingdom (+7.2%) exerting less influence on the figures than during the first quarter, according to the press release.

Business Finance

Brexit: Car production fell 44,5 % in April -Hammond to Tory race?

The UK car production fell 44,5 % in April according to the Society of Motor Facturers & Traders. The organisation estimates that the year-on-year production could fall by 10 %.

Manufacturing for domestic and overseas markets fell 44 % and 45 % respectively as the major companies were having production shutdowns due to Brexit timetable.

The Brexit-issue has also been in the politics. Chancellor of Exchequer Philip Hammond was speaking in the BBC Radio on Thursday and according to him the UK should reach to people if the UK Parliament cannot resolve the case. He was still stressing that the main objective for the Parliament is to proceed with the Brexit deal. He mentioned still that second referendum would be then better than a general election because of the hard situation in the Labour Party and Tories.

– It will be a stain on Parliament´s reputation if at the end, we have to admit that we have been unable to agree how to discharge the Brexit mandate from the people, he also said in the interview according to Independent newspaper.

Mr Hammond said he has a zero-tolerance approach to the breakdown or flouting of cabinet collective responsibility. He also mentioned that he might run for the Conservative leadership race  if there is no candidate who would reflect his thoughts properly.

Business Finance