2025-04-01 16:21

MILAN, April 1 (Reuters) - Tesla's (TSLA.O) , opens new tab new car registrations in Italy rebounded sharply in March after a plunge the previous month to stand down 7% year-on-year in the quarter as a whole, data from the Transport Ministry showed on Tuesday. The quarterly number adds to signs that drivers are shunning Elon Musk's electric vehicle brand as competition from China stiffens and as a form of protest against his political views. Sign up here. New registrations of Tesla vehicles rose 51% in March from the previous year, to 2,217 units, after a 54% yearly plunge in February. In the first quarter, the U.S electric vehicle maker sold 3,469 new cars in Italy, the data showed. https://www.reuters.com/business/autos-transportation/teslas-new-car-sales-italy-down-7-first-quarter-despite-51-jump-march-2025-04-01/

2025-04-01 16:09

FRANKFURT, April 1 (Reuters) - If a company can survive the upheaval caused by the adoption of artificial intelligence, AI will help it thrive in the longer run, a study , opens new tab presented at a European Central Bank conference has found. Its authors, who used data from the U.S. Census Bureau and surveys covering the period between 2017 and 2021, found early adopters of AI in the manufacturing sector saw their productivity drop as they replaced human workers with robots. Sign up here. Their findings go against prevailing narrative suggesting that AI makes work more productive and "augments" jobs in many cases rather than automating them away. "In the short term, we see a lot of pain," Kristina McElheran, one of the authors of the paper, told the conference. She explained the drop in productivity as a side-effect of AI interfering with manufacturers' established practices, such as keeping low inventories. Over time, however, these firms began outperforming on all counts - sales growth, productivity and employment - provided that they managed to make it through the upheaval. "Surviving this seems like part of the problem," McElheran, a researcher at the University of Toronto, said. She said this rebound did not generally happen at older companies, which also tend to be larger, and "struggle to get this done". McElheran and colleagues worked on a sample of 30,000 firms among which AI adoption rose from 7.5% to 9.1% over the course of the study period. Introducing the conference earlier, ECB President Christine Lagarde had said between 23% and 29% of workers in Europe were highly exposed to AI but this need not herald a "job apocalypse" because new roles were likely to be created while old ones are destroyed. https://www.reuters.com/technology/artificial-intelligence/if-ai-doesnt-kill-your-company-it-will-make-it-stronger-study-shows-2025-04-01/

2025-04-01 15:47

Trump expected to publish most ambitious tariff plans yet US markets should rally over next year after initial dip, Goldman Sachs says LONDON, April 1 (Reuters) - Hedge funds have scaled back risky bets and sought safety, data from Goldman Sachs (GS.N) , opens new tab shows, ahead of this week's widely anticipated announcement by U.S. President Donald Trump on reciprocal tariffs that has fuelled trade war fears. Trump has for weeks flagged April 2 as a "Liberation Day" delivery date for his most ambitious actions yet to upend more than half a century of global trade norms, which saw barriers to international commerce fall, but in ways the president believes disadvantaged American goods and workers. Sign up here. White House aides have drafted plans for tariffs of about 20% on most of the $3 trillion of goods imported annually to the U.S., the Washington Post reported on Tuesday. Higher tariffs and lower earnings estimates are likely to shrink the S&P 500's three-month returns by 5%, but U.S. markets should recover over the next year, a Goldman client note on Monday and seen by Reuters on Tuesday showed. Here's what Goldman Sachs prime brokerage says about hedge fund positioning. A prime brokerage desk lends money to hedge funds for trading and tracks their activities. 1/ RETREAT Hedge funds have reduced their net exposure across all regions, especially in Europe, followed by emerging markets and Asia. The amount traded on transparent and non-transparent stock exchanges trended lower in March, shows data from BMLL Technologies, bar a large options expiry on March 21. Such dates often see larger volumes traded as the derivatives that trade off their prices are closed. 2/ AVOID EMERGING MARKETS Hedge funds have sold out of major emerging markets. And so far this year, they have maintained more short than long positions in emerging market stocks in Latin America and Asia. In Asia, stocks have been particularly sold in large amounts in March, Goldman Sachs data showed. A short position expects an asset price to decline, a long bet hopes it will rise. 3/ CYCLING OUT OF CYCLICALS Hedge funds have cut their positions in stocks whose performance is closely tied to the economic cycle. These companies, like auto-parts manufacturers, some jewellery brands and home furnishing stores typically struggle when consumers have less money to spend. That move coincides with increased concern that tariffs are raising U.S. recession risks. 4/ U-TURN Hedge funds have starting selling European auto stocks, having snapped them up until early March, the Goldman data showed. Speculators have piled into short positions on the sector since Trump last week made public a plan to implement a 25% tariff on imported cars and light trucks from April 3. A duty on auto parts begins on May 3. The ratio of long positions compared to short bets against the auto sector are close to historic lows, said Goldman. 5/ METAL HEADS Hedge funds have been net buyers in large amounts in recent weeks of company stocks that are sensitive to metals prices, said Goldman. Hedge fund holdings in these names are at multi-year highs said the note. The note did not mention company names. https://www.reuters.com/markets/wealth/how-hedge-funds-have-positioned-trumps-liberation-day-2025-04-01/

2025-04-01 12:37

Republican budget cut proposals could fall heavily on SNAP and Medicaid California congress member David Valadao feels the heat at home from cuts proposed in Washington Local hospitals and clinics could be at risk, if budget cuts are passed Bakersfield, California, April 1 (Reuters) - When Blair Isbell's food aid benefits arrive each month, the community college student and mother of two starts planning how to spend the roughly $7 per person per day she gets for groceries. Isbell has an app on her phone for every grocery store in her area of California's Central Valley, and uses them to find the best deals. She favors pasta and rice combinations, stretching the meat and vegetables as far as she can for her sons, ages 4 and 8. Sign up here. Without those food benefits, paid through the federal government's Supplementary Nutrition Assistance Program, Isbell said she would have had to drop out of the degree program she hopes will eventually lead to a good job as an occupational therapist. "I wouldn't be able to be in school," she said. "I also, if I'm being honest, don't really know how I would make ends meet either." SNAP, which provided food aid to 41.7 million Americans last year , opens new tab, and Medicaid, the federal health plan which provides coverage to 72 million low-income and disabled people, could face sweeping cuts under a budget plan taking shape in Congress. A Republican blueprint passed by the House of Representatives in February seeks to lower taxes by $4.5 trillion over the coming decade, partially offsetting that lost revenue with $1.5 trillion in spending cuts. Those proposed cuts - which may not be finalized for weeks or months - would likely fall heavily on this part of the Central Valley, a vast expanse of orchards, vineyards and cattle ranches that produces a significant portion of the United States’ fruits, vegetables and nuts. It also has some of the highest poverty rates in the country. That puts Isbell's congressman, Republican David Valadao, in a tricky position in a competitive district that is among the top Democratic targets in 2026. Republicans are struggling over how to pare back the federal budget without alienating working-class voters whose support is crucial to retaining control of Congress. Republicans are hoping to expand their narrow lead in two special elections in Florida on Tuesday. More than half of Valadao's constituents receive Medicaid or Medi-Cal as it's known in California, which college student Isbell also uses. Some 28% get SNAP, or Cal-Fresh. Those are among the highest percentages for any congressional district in the nation, according to a Reuters review of Census data. Valadao voted for the budget cuts in February - and then days later called on his colleagues to produce a final bill that "strengthens critical programs like Medicaid and SNAP." Valadao's office did not respond to requests for comment from Reuters. The son of local dairy farmers, Valadao has built a reputation as one of his party’s most moderate members since he was first elected in 2012. He backed bipartisan efforts to overhaul immigration laws – a priority for farmers who rely on immigrant labor – and focused on bread-and-butter issues like irrigation infrastructure, steering clear of the culture wars that have occupied many of his colleagues. Valadao was one of just 10 House Republicans to vote for Trump's impeachment following the Jan. 6, 2021 attack on the U.S. Capitol, and one of only two still in office. But he has faced protests against the Republican budget proposals at his office in Bakersfield. "If he votes to cut Medi-Cal, it's going to affect him at the ballot box, because people are going to have a long memory if he takes away their health care," Sandy Reding, a registered nurse and a president of the California Nurses Association who joined the protests, told Reuters. SAFETY-NET PROGRAMS IN SIGHTS President Trump has ruled out cuts to Social Security and Medicare, the ballooning retirement and health care programs for the elderly, while calling for increased spending on defense and border security. That puts nearly half of the $6.8 trillion budget off limits, pointing Republicans to weigh cuts to other safety-net programs. The House plan does not explicitly call for Medicaid cuts, but it would be impossible to get to the party's goal of $880 billion in spending reductions without touching the program, according to the Congressional Budget Office. It would also be difficult to cut $230 billion in agricultural spending, as the blueprint proposes, without affecting SNAP, the department's biggest program. Congress is unlikely to finalize its budget plan for weeks, as the Senate must pass its own version and then the two must be reconciled. The offices of Senate Republican Leader John Thune and House Speaker Mike Johnson declined requests for comment. But House Republicans have in the past downplayed the possibility of steep benefit cuts, saying they will find savings by cracking down on waste and fraud and narrowing the focus to single mothers and others who most need benefits. Across Valadao's district, several hospitals and clinics are at risk of closure if those cuts are made, according to Jason Wells, president of Adventist Health's Central California Network of healthcare facilities, one of the largest health systems in the region. Raul Ayala, who oversees outpatient and other care for Adventist, said Medicaid cuts would be "catastrophic" for a rural region that is already short on health resources and doctors. Medicaid cuts could also affect health care delivered through the school system, including childhood immunization programs. At Pioneer School in the farming town of Delano, school nurse Linda Hinojosa presides over a vision clinic for children operating from a room with a rack of colorful children’s glasses on one wall. School nurses are mandated to test hearing and vision in certain grades - but without the clinic they couldn't do much beyond moving children to the front of the class, Hinojosa said. "It was so very frustrating to send a letter home and say 'your child failed and they can't see, but there was no place for a family to go," Hinojosa said. So in 2018 the school began to provide the service through a local nonprofit relying on Medicaid reimbursements. "If you can't see, you can't learn," Hinojosa said. "If we lost Medicaid or the ability to provide those services, it would be devastating." (This story has been refiled to change the headline and correct typos in paragraph 28) https://www.reuters.com/world/us/snap-medicaid-could-be-targets-republican-budget-cuts-hurting-poor-americans-2025-04-01/

2025-04-01 12:36

BUENOS AIRES, April 1 (Reuters) - The Mexican peso is set to trade relatively stable in coming months even as U.S. President Donald Trump escalates his use of tariffs, including a fresh barrage to be announced on Wednesday, a Reuters poll showed. After collapsing nearly 23% in 2024, the peso is up 1.8% year-to-date, supported by Mexican President Claudia Sheinbaum's recent success in negotiations to moderate Trump's initial tariff push. Sign up here. In six months, the local currency is forecast to drop marginally 0.4% to 20.55 per U.S. dollar from 20.46 on Monday, according to the median estimate of 26 foreign exchange specialists polled March 27-April 1. Many forecasts were based on the assumption that any new tariffs on Mexican products would be limited in scope and short-lived, with the Mexican and U.S. governments eventually reaching middle ground again on trade issues. However, Christian Admin de la Huerta Avila, an economist at Finamex, said "an announcement implying a significant deterioration in the trade outlook could put additional pressure on the exchange rate." Trump will announce reciprocal tariff rates on what he has called "Liberation Day" on April 2, after implementing levies on aluminium, steel and automobiles, along with increased tariffs on all goods from China. For now, the only carve-out for Mexico and Canada would be to deduct the value of any U.S. content from the 25% tariffs on vehicles and parts. Mexican officials have sought "preferential treatment" in the new trade scheme. Still, there are no indications the U.S. will honor previously established protections in the U.S.-Mexico-Canada Agreement. "A lot will also depend on Mexico's government response ... there is a probability of retaliation by Mexico and that could increase the temporary volatility of the peso," said James Salazar, deputy director of analysis at CIBanco. For the 12-month period, the peso is seen shedding 1.6% to 20.80 per U.S. dollar, according to the consensus view in the survey. Meanwhile, Brazil warned last week that global trade was at risk of being "weaponised" and World Trade Organization strains were likely to worsen before dissipating. Brazil's high interest rates are expected to at least partially shield the currency. The real is forecast to weaken 3.6% to 5.91 per U.S. dollar in 12 months from 5.70 on Monday. The central bank's tightening campaign to cool inflation is still not over, a Brazilian policymaker signaled this week. The Selic benchmark rate stands at 14.25%, above Mexico's key rate at 9.00%. "Brazil is in a cycle of monetary contraction, resulting in a growing interest rate differential with the United States," analysts at 4intelligence consultancy wrote. "This may help counterbalance fiscal problems, leading to relative stability in the USD/BRL exchange rate over the coming year." So far in 2025, the real has gained 8.4%, recovering from a selloff at the end of last year driven by investor worries about the feasibility of Brazil's fiscal adjustment plans. (Other stories from the April Reuters foreign exchange poll) https://www.reuters.com/markets/currencies/mexican-peso-trade-stable-coming-months-us-escalates-tariffs-2025-04-01/

2025-04-01 12:23

Reuters poll graphic on U.S. dollar safe haven status - BENGALURU, April 1 (Reuters) - The U.S. dollar is forecast to stabilize over the coming months despite mounting worries about the economic impact of President Donald Trump’s erratic tariff announcements, according to a Reuters survey of FX strategists. Over one-third of strategists surveyed in the past few days also expressed concern about the greenback's traditional role in currency markets as a safe haven. Sign up here. Trump is set to implement tariffs on U.S. trading partners on Wednesday, which in several cases come in addition to tariffs already announced, causing widespread confusion and uncertainty, including on currency trading desks. Traders offloaded near-decade high long bets in droves the past two months, fommodities and futures trading data showed, with positioning flipping to 'net short' for the first time since October. That was partly driven by recent speculation in markets for three more Federal Reserve rate cuts this year compared with just two previously. Asked how positioning would change by end-April, forecasters provided no clear majority view. That was a marked shift from just two months ago when they expected speculators to keep piling on "long" dollar trades. "There has been a certain degree of fatigue in trying to navigate U.S. tariffs and their implication for currencies these last few months. Investors don't want to get caught in the trap of pre-positioning for an outcome where it's very unclear what that outcome will actually turn out to be," said Paul Mackel, global head of FX research at HSBC. Of 35 strategists who responded on month-end positioning in a March 27-April 1 Reuters survey, 17 said there would not be much change, nine called for an increase in net shorts while seven said it would decrease. Just two said there would be a reversal to net longs. Medians from 69 strategists in the wider survey predicted the euro , currently around $1.08, would trade at $1.07 in three months and then $1.08 in six months. It was then predicted to rise about 2% to $1.10 in a year. The dollar index (.DXY) , opens new tab is down about 4% this year after gaining 7% in 2024, in part on a euro surge driven by optimism Germany's infrastructure and defence spending plans would revitalise the common currency bloc's economy. "We're very much caught in a wait-and-see mode. While many have thrown in the towel on the dollar, we still believe we don't have the true ingredients for it to be going down very meaningfully over the next six to 12 months," Mackel added. SAFE-HAVEN STATUS SLIPPING? But some expressed concerns Trump's isolationist policies would accelerate de-dollarisation in the longer term, on the heels of successive years of dollar outperformance, along with U.S. assets. Just under 40% of strategists who answered an extra question, 19 of 51, said they were concerned about an erosion in the dollar's reputation in markets, particularly in the longer-term. The remaining 32 said they weren't worried. “There are some tentative risks that the dollar’s safe haven status may be eroding,” said George Saravelos, global head of FX research at Deutsche Bank. “First, a weakening U.S. outlook reduces the attractiveness of the dollar as a risk-off hedge. Second, a broader challenge to the stability of U.S. institutions and global internal rule of law norms may decrease foreign investor willingness to allocate to dollars at the margin.” Even some of those who said they weren't concerned said there could be gradual slippage. "History teaches us that network effects make it extremely difficult to dislodge reserve currency status in the short-term, but a slower process of erosion can continue for a long time before such a binary shift in the global monetary architecture happens," said Arindam Sandilya, JP Morgan's co-head of global FX strategy and head of macro strategy for Asia. "(It is) more likely we see a continuation of the trends that have been in place for the past two decades – a steady decline in the U.S. dollar's allocation in central bank reserve holdings, and a search for alternative reserve assets such as gold." (Other stories from the Reuters April foreign exchange poll) https://www.reuters.com/markets/currencies/us-dollar-outlook-more-subdued-tariffs-souring-sentiment-2025-04-01/