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July 23, 2018, 12:50 p.m. EDT

Fiat, Ferrarri close lower after Marchionne’s exit, weighing on European stocks

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By Carla Mozee, MarketWatch


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European stocks ended lower and marked a third straight loss on Monday, as shares of Fiat Chrysler Automobiles after the sudden departure of longtime chief Sergio Marchionne, amid a fresh round of earnings reports.

Sentiment also appeared dampened by an assessment on the impact of trade disputes on global economic growth by officials from the Group of 20 who met in Argentina over the weekend.

How markets moved

On national indexes, Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +0.81%  fell 0.9% to end at 21,605.21, with Fiat Chrysler and Ferrari NV among the components hit after Marchionne stepped down from his duties.

France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.63%  closed 0.4% lower at 5,378.25, and the U.K.’s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.37%  ended down 0.3% at 7,655.79. Germany’s DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.81%  slipped 0.1% to close at 12,547.39. In Madrid, the IBEX 35 /zigman2/quotes/210597995/delayed XX:IBEX +0.81%  ended 1.3 points higher at 9,726.10. UBS on Monday said it’s now recommending investors add long exposure to the IBEX.

The broader Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.74%  fell 0.2% to close at 384.88, with a third consecutive decline led by the tech and consumer goods groups. The telecom, financial and oil and gas sectors, however, ended higher. The index on Friday fell 0.2%, but ended last week with a third consecutive weekly gain.

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.2069%  traded at $1.1707, pulling back from $1.1722 late Friday in New York.

What’s drove markets

Among Monday’s decliners on the Stoxx 600 were shares of companies who lost auto industry legend Sergio Marchionne as a leader, as Marchionne is being treated in a Zurich hospital for health complications after shoulder surgery.

Marchionne served as chairman and chief executive at Ferrari and Fiat Chrysler, chairman of industrial and vehicle equipment maker CNH Industrial, and as vice chairman of Exor, whose shareholdings include Fiat, Ferrari and CNH.

“Though Marchionne was due to retire at the end of the year, the development is unexpected. While investors do not like negative surprises or uncertainty, we don’t see the change in captain altering the course of the ship at [Fiat Chrysler],” as Mike Manley, Marchionne’s successor, “is an extremely experienced auto exec,” said Evercore ISI analyst George Galliers in Sunday note.

Ferrarri named Louis Camilleri as its new CEO. “Ferrari was increasingly tuned to perfection by Marchionne, and it has to be seen whether this can remain so without him,” wrote Galliers.” We do not see Camilleri’s lack of automotive experience as an issue, but Ferrari is and always has been a finely balanced machine with the various stakeholders having very strong views on what the company is.”

Meanwhile, finance ministers and central bankers of the G-20 group of countries ended their meeting in Buenos Aires on Sunday warning “heightened trade and geopolitical tensions pose as downside risks for global economic growth, which at this time “remains robust,” they said in a communique.

U.S. Treasury Secretary Steven Mnuchin told reporters in Buenos Aires that the European Union, China, and Japan must remove tariffs and subsidies before the U.S. discusses trade agreements with those regions.

Mnuchin also said “it’s definitely a realistic possibility” that U.S. President Donald Trump will follow through on a threat to put tariffs on all $500 billion worth of Chinese imports into the U.S.

/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
26,489.18
+211.61 +0.81%
Volume: 0.00
Oct. 15, 2021 5:35p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,727.52
+42.31 +0.63%
Volume: 84,105
Oct. 15, 2021 6:05p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,234.03
+26.32 +0.37%
Volume: 695,483
Oct. 15, 2021 4:56p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,587.36
+124.64 +0.81%
Volume: 73,666
Oct. 15, 2021 6:30p
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/zigman2/quotes/210597995/delayed
XX : Spain: Madrid
8,997.00
+72.00 +0.81%
Volume: 217.37M
Oct. 15, 2021 5:38p
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/zigman2/quotes/210599654/delayed
XX : STOXX
469.39
+3.47 +0.74%
Volume: 0.00
Oct. 15, 2021 11:03p
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1575
-0.0024 -0.2069%
Volume: 0.0000
Oct. 18, 2021 2:40a
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