Fiat Chrysler bails; ECB time; Stock market gains
Posted June 6, 2019 4:59 a.m. EDT
CNN — 1. Fiat Chrysler bails: Fiat Chrysler has withdrawn its proposal to merge with French automaker Renault, squashing a deal that would have reshaped the auto industry and created the world's third largest carmaker.
The company said Wednesday that it "has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."
Earlier in the day, Renault said that the French government had requested its board of directors postpone the vote on the merger.
France, which owns 15% of Renault and is the company's largest shareholder, previously indicated that it would support a merger if the companies protect French jobs and auto plants.
Shares in Renault plunged nearly 7% in Paris on Thursday after the proposal was withdrawn. Fiat Chrysler stock dropped 1.6% in Milan.
2. ECB time: The European Central Bank meets Thursday as global trade tensions escalate and the race to find a replacement for president Mario Draghi heats up.
Analysts expect the central bank to outline details on additional cheap loans for banks while maintaining historically low interest rates.
Almost certain to come up: whether Draghi and the ECB would be open to cutting interest rates lower still.
"Draghi may have to adopt a dovish tone again, and, at least, not rule out rate cuts if asked about them," Bank of America Merrill Lynch analysts said recently in a research note.
The US Federal Reserve suggested it could cut rates earlier this week, driving markets higher. Fed Chair Jerome Powell said that he's closely monitoring developments on trade, and that the bank will "act as appropriate to sustain the expansion."
Meanwhile, India's central bank on Thursday gave the country its third consecutive interest rate cut as it tries to get a slumping economy back on track.
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3. Market gains: US stock futures point to another day of gains as investors stay hopeful that the Federal Reserve could cut interest rates.
The Dow is poised to rise 70 points, or 0.3%. The Nasdaq and S&P 500 are set for a similar jump.
European markets opened higher after a mixed session for stocks in Asia. Britain's FTSE 100 rose 0.6%, while Germany's DAX index added 0.5%.
In Hong Kong, the Hang Seng rose 0.2%, while Japan's Nikkei closed flat. The Shanghai Composite, however, dropped 1.2%.
The Dow closed up 0.8% on Wednesday, logging its third consecutive day of gains. The S&P 500 was up 0.8%, and the Nasdaq added 0.6%.
4. Coming this week:Thursday — ECB and Reserve Bank of India rate decisions; Europe's GDP growth estimate; Beyond Meat earningsFriday — US jobs report