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☆ Maserati's going electric while simultaneously reconnecting to its gas-powered past
▼ + stars: | 2023-04-19 | by ( Peter Valdes-Dapena | ) edition.cnn.com time to read: +5 min

Next year, Maserati will reveal a fully electric sedan for which they will be no gas-powered version at all. So does Ferrari, Maserati’s sister brand until a few years ago when it was spun off under its own stock symbol. The Maserati Grecale SUV has an aggressive driving feel. Now that the spinoff of Ferrari has left Maserati the company’s only ultra-luxury brand, Grasso feels more is expected, he said. “We can only be at ease when Maserati’s profitability is above Stellantis’s profitability,” he said.

NEW YORK, April 18 (Reuters) - The U.S. government's deadline to raise the $31.4 trillion debt ceiling could be sooner than expected, raising the prospect of a short-term debt limit extension, analysts said on Tuesday. Meanwhile, on Monday, U.S. House of Representatives Speaker Kevin McCarthy outlined spending cuts his fellow Republicans would demand in exchange for voting to raise the debt limit. "As the debt limit deadline comes into better focus with additional tax receipt data, we expect to see somewhat greater pricing of debt limit risks in financial markets," Goldman Sachs analysts said in a note. The yield on the 2-month U.S. Treasury bill jumped on Tuesday to its highest level since at least 2018, as unease about the U.S. debt ceiling and the likelihood of another interest rate hike took hold. The cost of insuring U.S. debt against default for one year stood at about 95 basis points as of Monday, according to Refinitiv data - well above 2011 levels, when a standoff over the debt ceiling triggered the first credit downgrade of the U.S. government.

Wells Fargo fared less favorably, down 0.3%, and regional banks including Zions (ZION.O) and First Republic (FRC.N) fell. Net interest income, a measure of how much a bank earns from lending, surged 49% to $20.8 billion. Meanwhile, Wells Fargo set aside $1.21 billion in the quarter to cover for potential loan losses, compared to a release of $787 million a year earlier. "While most consumers remain resilient, we've seen some consumer financial health trends gradually weakening from a year ago," Mike Santomassimo, Wells Fargo finance chief, told analysts. More banking results are due over the coming week, including Bank of America (BAC.N) and Goldman Sachs (GS.N) on Tuesday and Morgan Stanley (MS.N) on Wednesday.

[1/2] The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. First-quarter 2023 earnings from JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) beat Wall Street expectations on Friday as consumer and corporate spending held up in the face of rate rises, although all three saw signs of a slowdown and made provisions accordingly. Net interest income, a measure of how much a bank earns from lending, surged 49% to $20.8 billion. Meanwhile, Wells Fargo set aside $1.21 billion in the quarter to cover for potential loan losses, compared to a release of $787 million a year earlier. "While most consumers remain resilient, we've seen some consumer financial health trends gradually weakening from a year ago," Mike Santomassimo, Wells Fargo finance chief, told analysts.

☆ BlackRock first-quarter profit beats on robust inflows
▼ + stars: | 2023-04-14 | by ( ) www.reuters.com time to read: +1 min

Net inflows for the first quarter were at $110 billion, compared with $86 billion a year earlier. "I believe today's crisis of confidence in the regional banking sector will further accelerate capital markets growth, and BlackRock will be a central player," BlackRock Chief Executive Larry Fink said. BlackRock, which makes most of its money from fees charged for investment advisory and administration services, reported an adjusted profit of $7.93 per share. Analysts had estimated a profit of $7.76 per share, according to Refinitiv IBES data. Reporting by Jaiveer Singh Shekhawat in Bengaluru and Davide Barbuscia in New York; Editing by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

The most surprising appointment was that of the new Enel chief Flavio Cattaneo, a seasoned corporate manager who leaves his role as vice president of high-speed train operator Italo to lead the country's biggest utility. He leap-frogged Stefano Donnarumma, the current chief executive of power grid Terna (TRN.MI), widely seen as Meloni's first choice. Enel shares were down 4% on Thursday, with investors fretting over Cattaneo's lack of expertise in the renewable energy sector. Leading politicians in Meloni's right-wing coalition said this issue was a major stumbling block for Donnarumma, along with pressure from League chief Salvini, a strong supporter of Cattaneo. Besides concessions on Enel, Meloni kept a tight grip on the rest of the main appointments.

☆ Milan lead Napoli after Bennacer goal
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +1 min

[1/5] Soccer Football - Champions League - Quarter Finals - First Leg - AC Milan v Napoli - San Siro, Milan, Italy - April 12, 2023 AC Milan's Ismael Bennacer celebrates scoring their first goal with Davide Calabria REUTERS/Daniele MascoloMILAN, April 12 (Reuters) - AC Milan took a step towards their first Champions League semi-final appearance for 16 years as Ismael Bennacer's goal earned them a 1-0 win over Napoli in the quarter-final first leg at the San Siro on Wednesday. On a rainy night, Serie A leaders Napoli's first European clash with seven-times European champions Milan was also their first appearance in the quarter-finals of Europe's most prestigious club competition. Attempting to avenge their 4-0 home defeat by Milan in Serie A this month, Napoli began pressing immediately, but the hosts took the lead five minutes before the interval when Brahim Diaz teed up Bennacer who struck a low shot inside the far post. Napoli's situation worsened 16 minutes from time when midfielder Andre-Frank Zambo Anguissa received a second yellow card for pushing Theo Hernandez. The second leg of the quarter-final is in Napoli on April 18.

"Presumably, this will also see a cessation of Fed policy rate hikes after one more possible hike at the May meeting, although it’s also possible the Fed is done already," he added in an emailed statement to Reuters. For now, traders take a more dovish view and are betting policymakers will cut rates later in the year, taking the fed funds rate to 4.35% from its current 4.75% to 5% range. Investors will be closely watching an inflation report on Wednesday to gauge the near-term trajectory for interest rates. According to Rieder, inflation should ease going forward, in line the economic slowing seen last month. "Hopefully ... markets can look forward to a more relaxed Fed from here," he said.

☆ Wall St Week Ahead US inflation data to test market’s bets on future Fed easing
▼ + stars: | 2023-04-07 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +4 min

Following last month’s banking crisis, investors have become more convinced the Federal Reserve will cut rates in the second half to ward off an economic downturn. That view could gain support if next week’s inflation reading shows a strong rise in consumer prices even after aggressive Fed rate hikes over the past year. The firm is recommending clients slightly underweight equities, expecting interest rate hikes to hit consumer spending and corporate profits. Bets on a more dovish Fed have boosted tech and growth stocks, whose future profits are discounted less when interest rates fall. “If the Fed was trying to protect investors, one way would be to cut rates," Hackett said.

That spread , which has been in negative territory since November, plunged to new lows this week, standing at nearly minus 170 basis points on Thursday. Fed Chair Jerome Powell said last year that the 18-month U.S. Treasury yield curve was the most reliable warning of an upcoming recession. "Powell's curve ... continues to plunge to fresh century lows," Citi rates strategists William O'Donnell and Edward Acton said in a note on Thursday. Refinitiv data showed the curve was the most inverted since at least 2007. But market participants believe tighter monetary policy is already starting to hurt growth and are betting on rate cuts later this year.

☆ Credit Suisse AT1 bondholders hire law firm for possible litigation
▼ + stars: | 2023-04-03 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, April 3 (Reuters) - Some holders of Credit Suisse AT1 bonds wiped out by the bank's planned merger with UBS have instructed law firm Quinn Emanuel Urquhart & Sullivan to represent them for discussions with Swiss authorities and possible litigation to recover losses. The bondholder group holds a "significant percentage of the total notional value" of the AT1 bonds, the law firm said in a statement on Monday. AT1 bonds are the riskiest type of debt banks can issue, ranking immediately after equity in the event of losses. Banks' AT1 bonds fell after the Swiss decision highlighted the risks of investing in these securities. Meanwhile, Switzerland's Federal Prosecutor has opened an investigation into the state-backed takeover of Credit Suisse by UBS Group, the office of the attorney general said on Sunday.

☆ Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover
▼ + stars: | 2023-03-29 | by ( John Revill | ) www.reuters.com time to read: +5 min

[1/5] Sergio Ermotti, newly rehired CEO of UBS Group AG attends a news conference in Zurich, Switzerland March 29, 2023. "Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. Reuters GraphicsErmotti had earlier described the task of integrating UBS and Credit Suisse as "urgent and challenging". The Dutch executive was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.

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☆ Ermotti returns to UBS to steer Credit Suisse takeover
▼ + stars: | 2023-03-29 | by ( John Revill | ) www.reuters.com time to read: +3 min

He takes charge weeks after UBS bought rival Swiss bank Credit Suisse in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground. "Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. HAMERS HANDS OVER REINSErmotti said he was looking forward to integrating UBS and Credit Suisse. He was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.

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☆ Explainer: What are credit default swaps and why are they causing trouble for Europe's banks?
▼ + stars: | 2023-03-28 | by ( Amanda Cooper | ) www.reuters.com time to read: +6 min

LONDON, March 28 (Reuters) - Turbulence in Europe's banks following the implosion of 167-year-old Credit Suisse (CSGN.S) and runs on regional banks in the U.S. has focused attention on the role played by credit default swaps in all the turmoil. The moves followed a surge in the cost of insuring Deutsche Bank's debt against default via credit default swaps (CDS) to a more than four-year high last week. Credit default swaps are derivatives that offer insurance against the risk of a bond issuer - such as a company, a bank or a sovereign government - not paying their creditors. The CDS market is worth around $3.8 trillion, according to the International Swaps and Derivatives Association. The CDS market is small relative to equities, foreign exchange or the global bond markets, where there are more than $120 trillion bonds outstanding.

Deposits held by small U.S. banks dropped by a record $119 billion to $5.46 trillion after the collapse of Silicon Valley Bank on March 10, according to data released Friday by the Federal Reserve. "We expect stress in the banking system to weigh on credit growth, which will in turn reduce real GDP growth," Goldman Sachs analysts led by chief economist Jan Hatzius wrote in a note, referring to gross domestic product. Tighter credit conditions will exert meaningful pressure on economic activity, but the effect will not be catastrophic unless the situation escalates into "full-blown crisis of confidence," Barclays analysts wrote in a note last week. U.S. regulators announced on Monday they would backstop a deal for regional lender First Citizens BancShares (FCNCA.O) to acquire failed Silicon Valley Bank, triggering an estimated $20 billion hit to a government-run insurance fund. "Banking system stress remains high, but there are some signs of stabilization," Bank of America Corp (BAC.N) analysts wrote in a note.

[1/3] The logo of Swiss bank Credit Suisse is seen in front of a branch office in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann/File PhotoWASHINGTON/FRANKFURT, March 26 (Reuters) - Stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, a U.S. Federal Reserve policymaker said on Sunday, as a European Central Bank official also flagged a possible tightening in lending. "What's unclear for us is how much of these banking stresses are leading to a widespread credit crunch. Meanwhile in Europe, the ECB believes that recent banking sector turmoil may result in lower growth and inflation rates, its vice president Luis de Guindos said. Turbulence among banking stocks on both sides of the Atlantic continued into the end of the week, despite efforts by politicians, central banks and regulators to dispel concerns.

☆ As banking sector confidence falters, central banks called on to do more
▼ + stars: | 2023-03-26 | by ( Davide Barbuscia | ) www.reuters.com time to read: +4 min

NEW YORK, March 26 (Reuters) - Some investors and analysts are calling for more coordinated interventions from central banks to restore financial stability, as they fear that tumult in the global banking sector will continue amid rising interest rates. On Friday, shares of Deutsche Bank (DBKGn.DE) plunged amid concerns that regulators and central banks have yet to contain the worst shock to the banking sector since the 2008 global financial crisis. Global central banks including the Federal Reserve have recently taken measures to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements. "The issue with European banks and big U.S. banks at the moment is confidence. Meanwhile, overall deposits in the banking sector have declined by almost $600 billion since the Fed began to raise interest rates last year, the biggest banking sector deposit outflow on record, noted Torsten Slok, chief economist at Apollo Global Management.

LONDON, March 23 (Reuters) - Credit Suisse (CSGN.S) bondholders are seeking legal advice after the Swiss regulator ordered 16 billion Swiss francs ($17.5 billion) of Additional Tier-1 (AT1) debt to be wiped out under its rescue takeover by UBS (UBSG.S). Not only did bondholders expect protection, but UBS is paying $3.23 billion to Credit Suisse shareholders. One Paris-based manager of a debt fund that held Credit Suisse AT1s said he had been "spammed" with emails from lawyers. Facing any challenge could be Credit Suisse, its new owner UBS, Swiss regulator FINMA or the Swiss government. It also cited an emergency March 19 ordinance which it said authorised FINMA to instruct Credit Suisse to write off the bonds.

☆ Analysis: Investors cautious on U.S. stocks, even though Fed hikes may soon end
▼ + stars: | 2023-03-23 | by ( Lewis Krauskopf | ) www.reuters.com time to read: +5 min

Stocks fell on Wednesday, with the benchmark S&P 500 (.SPX) closing down 1.65% after swinging between gains and losses during Fed Chairman Jerome Powell's press conference following the meeting. Futures markets are now pricing a Fed funds rate of around 4.25% by year-end, compared with the range of 4.75% to 5% that took effect on Wednesday. US stock market during the Fed's hiking cycleUNCERTAIN OUTLOOKStocks have been resilient this year in the face of uncertainty, with the S&P 500 up 2.5% since the end of 2022. A drop in Treasury yields from recent highs has also given a tailwind to stocks, especially to big tech and growth names that are heavily weighted in the S&P 500. Corporate profits are another potential trouble spot, with S&P 500 earnings expected to post year-over-year declines in the first and second quarters after falling 3.2% in the fourth quarter of 2022, according to Refinitiv IBES.

LONDON, March 21 (Reuters) - Distressed debt investors and large hedge funds are buying up Credit Suisse (CSGN.S) additional tier-1 bonds at rock-bottom prices after they were written down to zero in the Swiss bank's rescue by cross-town rival UBS (UBSG.S). AT1 bonds issued by other European banks tumbled on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of this type of debt. Buyers have included a mixture of hedge funds and deep distressed debt funds, which Southey expected would need to hold the bonds for an extended period before they paid off. Some of those buyers intend to join groups that would litigate to improve odds on cashing in on the bonds, Southey said. "It's quite possible that we will see demand from buyers of subordinated bank debt to have more explicit protections written into these bond prospectuses in the future."

☆ PIMCO lost $340 mln with Credit Suisse AT1 bonds write-off - source
▼ + stars: | 2023-03-21 | by ( Davide Barbuscia | ) www.reuters.com time to read: +2 min

Credit Suisse's (CSGN.S) Additional Tier 1 (AT1) bonds in PIMCO’s mutual funds had been worth about $340 million on Friday, the source familiar with the matter said. PIMCO's current holdings of Credit Suisse bonds, excluding the AT1 debt, were worth over $4 billion, said the source, who was speaking on condition of anonymity. Some Credit Suisse bonds rallied on Monday after the state-backed rescue of the embattled lender. AT1 bonds issued by other European banks, instead, fell sharply on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of investing in these securities. Meanwhile, law firm Quinn Emanuel Urquhart & Sullivan said it was talking to a number of Credit Suisse AT1 holders about possible legal action.

☆ Maserati listing would need more engine power
▼ + stars: | 2023-03-21 | by ( ) www.reuters.com time to read: +2 min

MILAN, March 21 (Reuters Breakingviews) - Maserati says it wants to be more profitable before considering a spinoff from 52 billion euro parent Stellantis (STLAM.MI). But assume Maserati were to treble sales to 75,000 units by 2025, a target the company touted in 2020, taking revenue to perhaps 6.7 billion euros, and hit the 20% margin target in that year. It could then already fetch a whopping 15 billion euros if valued at an 11 times 2025 EBIT multiple, in line with Porsche. That would make a spinoff meaningful for Stellantis, giving Grasso reason to step on the gas. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Some $17 billion worth of AT1 Credit Suisse bonds will be written down to zero on the orders of the Swiss regulator as part of a rescue merger with UBS (UBSG.S). Under the deal, holders of Credit Suisse AT1 bonds will get nothing, while shareholders, who usually rank below bondholders in terms of who gets paid when a bank or company collapses, will receive $3.23 billion. AT1 bonds issued by other European banks fell sharply on Monday as the treatment of Credit Suisse AT1 bondholders highlighted the risks of investing in this type of debt. AT1 bonds act as shock absorbers if a bank's capital levels fall below a certain threshold. Meanwhile, law firm Quinn Emanuel Urquhart & Sullivan said it was talking to a number of Credit Suisse AT1 holders about possible legal action.

LONDON, March 20 (Reuters) - Lawyers from Switzerland, the United States and UK are talking to a number of Credit Suisse (CSGN.S) Additional Tier 1 (AT1) bond holders about possible legal action after the state-backed rescue of Credit Suisse by UBS (UBSG.S) wiped out AT1 bonds, law firm Quinn Emanuel Urquhart & Sullivan said on Monday. Quinn Emanuel said it was in discussions with Credit Suisse AT1 bondholders representing a "significant percentage" of the total notional value the instruments. PIMCO had 3.49% of its 5.66 billion euro ($6.06 billion) GIS Capital Securities Fund in Credit Suisse AT1 bonds, the Morningstar data showed. Lazard Asset Management had 7.4% of its 1.45 billion euro Lazard Capital Fi SRI fund allocated to Credit Suisse AT1 debt. GAM's 1.15 billion euro Star Credit Opportunities fund's exposure to Credit Suisse AT1 debt was 4.81% at the end of last month, based on the Morningstar data.

[1/2] Logos of Swiss banks UBS and Credit Suisse are seen in Zurich, Switzerland March 19, 2023. UBS will buy rival Swiss bank Credit Suisse for 3 billion Swiss francs ($3.23 billion) and agreed to assume up to $5.4 billion in losses as it winds down the smaller peer's investment bank after a shotgun merger engineered by Swiss authorities. The U.S., UK and Swiss central banks are all scheduled to meet in the week ahead. Even after Sunday's news on Credit Suisse, optimism from analysts was laced with caution and some scepticism. Others drew attention to the losses likely to be suffered by Credit Suisse junior bondholders.

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