The potential takeover of Germany’s Commerzbank by Italy’s UniCredit has ignited a fierce political and economic debate, with German Chancellor Olaf Scholz coming out firmly against the deal.

As UniCredit raises its stake in Commerzbank from 9% to 21%, concerns over national sovereignty and economic independence have taken center stage.

The Italian bank, led by CEO Andrea Orcel, plans to increase its shareholding further, targeting up to 29.9%.

Scholz told Reuters on the sidelines of a visit to New York on Monday that “unfriendly attacks (and) hostile takeovers are not a good thing for banks and that is why the German government has clearly positioned itself.”

This move marks a critical moment in the long-simmering tensions over European banking consolidation, particularly when it involves cross-border mergers.

With the German government’s refusal to support the takeover, it’s clear that the deal faces substantial political resistance.

“We do not support a takeover, and we have informed UniCredit about this,” a German government official told the Financial Times.

National sovereignty and strategic interests

At the heart of the opposition is Germany’s deep-rooted concern about losing control over a critical financial institution to a foreign entity.

Commerzbank, a key lender to the nation’s small and medium-sized Mittelstand businesses, is considered vital to the German economy.

Any disruption to its operations, such as the potential changes in management or strategic direction under UniCredit, could have far-reaching consequences.

Labour unions have raised alarms over possible job cuts, while Commerzbank executives warn that a merger with UniCredit could undermine lending to Mittelstand companies, threatening the backbone of Germany’s economy.

Friedrich Merz, leader of Germany’s opposition party, expressed his dismay over the prospect of the takeover, calling it a “disaster for the German banking sector.”

His remarks underscore the broad-based political resistance to the deal, cutting across party lines and labor interests.

For many in Germany, this is not just a business deal but a matter of national interest.

UniCredit’s ambitions and Berlin’s resistance

UniCredit’s interest in Commerzbank is part of a broader strategy by CEO Andrea Orcel to position the Italian lender as a European banking giant.

Orcel’s vision includes using UniCredit as a vehicle to consolidate the fragmented European banking sector, with the Commerzbank deal potentially catalyzing further mergers across the continent.

A successful acquisition would mark the first significant cross-border bank deal in Europe since the financial crisis, which could lead to a wave of similar mergers.

However, Germany’s opposition to the takeover complicates this vision.

After initially acquiring 9% of Commerzbank—half of which came directly from the German government—UniCredit has met resistance from Berlin at every turn.

A person familiar with Commerzbank’s management told FT that Orcel’s latest move seems at odds with his earlier statement that he would not pursue a hostile takeover.

The German government, which still holds a 12% stake in Commerzbank, had previously planned to sell down its holdings but has since backtracked in response to domestic opposition to a takeover.

By blocking further negotiations, Berlin effectively forced UniCredit’s hand, prompting the Italian bank to raise its stake without government backing.

As one government official stated, “Berlin supports the strategy of Commerzbank which is geared towards independence.”

Germany-Italy relations at stake?

Beyond political resistance, UniCredit also faces regulatory obstacles.

To increase its stake beyond 10%, the bank requires approval from the European Central Bank (ECB), and while the 11.5% stake has been acquired, the transaction will not be finalized until all necessary approvals are in place.

If successful, UniCredit would leapfrog the German government as Commerzbank’s largest shareholder, putting even more pressure on Berlin.

The takeover attempt has not only strained relations between UniCredit and the German government but has also introduced diplomatic tensions between Italy and Germany.

Italian Foreign Minister Antonio Tajani defended UniCredit’s actions, stating they were “more than legitimate.”

Meanwhile, officials in Rome, including those close to Prime Minister Giorgia Meloni, have privately expressed frustration over Germany’s opposition, accusing Berlin of hypocrisy, Bloomberg reported.

According to sources cited in the Bloomberg report, Italian officials are frustrated that Germany promotes European integration but balks at the idea of a cross-border bank merger within the EU.

At the same time, some in Rome have also expressed frustration at Orcel for being overly aggressive in his bid for the German bank, according to the report.

They are worried that it could affect relations between the two countries.  

European banking consolidation

This battle over Commerzbank could serve as a pivotal moment for the future of European banking consolidation.

While UniCredit aims to position itself as a leader in this consolidation, its attempt to acquire Commerzbank is likely to set a precedent for future cross-border deals.

Should the acquisition succeed, it could inspire other European banks to explore similar moves, consolidating a sector that has long been fragmented.

However, the UniCredit-Commerzbank saga also reveals the deep challenges facing such consolidation efforts, particularly when national interests are at stake.

Germany’s opposition highlights how political considerations, national sovereignty, and economic strategy can clash with the broader vision of a unified European banking market.

As UniCredit continues to pursue its strategic ambitions, it remains unclear whether Orcel’s vision of a cross-border banking giant can overcome the formidable resistance posed by national interests and political opposition.

For now, the battle over Commerzbank is far from over, and its outcome will have significant implications for the future of European finance.

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Shares of Trump Media hit their lowest level in over a year on Monday, following the expiration of a lockup agreement that had restricted the sale of shares by majority owner Donald Trump and other company insiders.

The stock, trading under the symbol DJT on the Nasdaq, dropped more than 6% in early trading, marking its sixth consecutive day of declines.

DJT stock price down over 80% since March

Since its public debut in March, Trump Media’s share price has fallen by over 80%.

As of Monday morning, the stock was trading at its lowest intraday level since July 2023.

At its peak in March, the company’s market capitalization exceeded $10 billion, but it has since shrunk to around $2.5 billion.

Trump’s nearly 57% stake in the company was worth less than $1.5 billion at the opening of the trading session.

The lockup restrictions, which barred insiders from selling shares for a period after Trump Media’s public listing, expired at the close of trading on Thursday.

Trading volume spiked significantly following the lift of these restrictions, with more than 14 million shares traded on Thursday and 22 million on Friday, far exceeding the 30-day average volume of 8.3 million shares.

By Monday morning, approximately 7 million shares had been exchanged within the first 90 minutes of trading.

Will Trump sell his DJT shares?

Donald Trump, a key figure behind Truth Social and the company’s primary attraction for investors, has stated that he will not sell his shares.

Earlier in September, Trump said, “I have no intention of selling,” causing a brief uptick in the stock price.

However, other early investors, such as ARC Global and United Atlantic Ventures, which together own 11% of DJT shares, have not made similar promises.

The possibility of more stock issuance is also in play after a court ruling in favor of ARC Global, which may entitle the sponsor to more shares.

Invezz had reported earlier this month about the likelihood of Trump wanting to sell his stocks immediately after the expiration of the lock-up agreement as he needs liquid cash to fund his campaign, pay for legal fees, and pay for the past penalties.

The stock has seen fluctuations in its value, partly due to ongoing investigations and regulatory scrutiny surrounding the SPAC merger.

Additionally, Trump will want to sell his stake because of the stock’s performance in the past few months and due to the fluctuations in its value partly due to ongoing investigations and regulatory scrutiny surrounding the SPAC merger.

Investors, followers, and market analysts will be closely monitoring Trump’s actions in the coming days and weeks to gauge the future direction of Truth Social and its standing in the competitive social media landscape.

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Micron Technology Inc. (NASDAQ: MU) has experienced a nearly 40% decline since mid-June, despite being a key beneficiary of the artificial intelligence boom, which significantly improved its profits and revenues in 2024.

Broader challenges, such as fears of an impending economic slowdown and potential trade restrictions with China, have weighed heavily on the semiconductor industry.

However, as Micron prepares to release its financial results for the fourth quarter on September 25, there are strong indicators that the memory chipmaker could break free from these challenges and see a rally in its stock price.

Micron Stock positioned for growth

In June, Micron projected a sequential revenue increase of 12%, aiming for $7.6 billion in its fourth fiscal quarter.

However, data from TrendForce, a leading market intelligence provider based in Taiwan, suggests that the growth in the DRAM industry during this period may exceed Micron’s guidance.

Moreover, NAND prices are expected to rise by 5% to 10% sequentially, which could further bolster Micron’s earnings for the quarter.

Analysts anticipate that Micron will report earnings of 97 cents per share this quarter, a significant turnaround from a loss of $1.21 per share during the same period last year.

A strong earnings report could attract income investors, especially since Micron currently offers a dividend yield of 0.49%.

Notably, some analysts even suggest that Micron might represent a smarter AI investment than Nvidia.

Micron shares trading at a discount

Currently, Micron shares are trading at a forward price-to-earnings (P/E) ratio of just 10, making them an attractive option considering the company’s accelerated growth driven by AI tailwinds.

The global memory market is projected to reach $360 billion by the end of the decade, up from $136 billion in 2022, according to Fortune Business Insights.

This substantial growth potential is one reason why JPMorgan analyst Harlan Sur recommends investing in Micron shares ahead of the earnings report.

He believes that AI-driven server demand could push MU’s stock price up to $180, representing nearly a 100% increase from current levels.

These favorable catalysts could also enhance Micron’s outlook.

For instance, the company’s HBM3E capacity is sold out through 2025, with significant growth anticipated in fiscal 2025.

The surge in AI demand for high-bandwidth memory and enterprise solid-state drives is expected to boost profitability.

Wall Street is optimistic about Micron’s prospects, expecting the Nasdaq-listed firm to guide for approximately $8.55 billion in revenue for its fiscal Q1.

As the semiconductor industry evolves, Micron’s ability to adapt and thrive in a competitive landscape may position it well for continued success.

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Asian stocks rose on Tuesday, reaching their highest levels in more than two-and-a-half years, as a fresh wave of Chinese stimulus measures bolstered market sentiment.

Investors were further encouraged by expectations of additional US interest rate cuts, which continued to pressure the US dollar.

China’s top financial regulators unveiled a comprehensive package of economic measures aimed at reviving growth.

The government announced a 50-basis-point cut in bank reserves and a reduction in mortgage rates, steps designed to tackle the nation’s sluggish economic performance.

Stimulus measures larger than anticipated, markets react

The impact was immediate, as Chinese stocks surged. The blue-chip CSI300 Index opened 1% higher, and the broader Shanghai Composite Index also gained 1%.

Hong Kong’s Hang Seng Index rose by more than 2% in early trading, while the mainland properties index surged 5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.41%, reaching 588.43—its highest level since April 2022.

“While there was some anticipation that stimulus measures would be announced after they mentioned there was going to be a press briefing, the package of measures so far, I would say, is probably larger than what the market was expecting,” said Khoon Goh, head of Asia research at ANZ in a Reuters report.

Taken as a whole, this could help support the economy. Whether or not it is sufficient to address some of the underlying issues, particularly around the lack of confidence in the economy, I think still remains to be seen.

Focus on central banks as rate decisions loom

Investors also turned their attention to the Reserve Bank of Australia (RBA), which was expected to maintain its current interest rates during its policy meeting later in the day.

Despite the US Federal Reserve’s recent 50-basis-point cut, expectations of a similar move by Australia were mixed.

“The RBA is likely to stick to its hawkish stance for now, aiming to keep inflation expectations anchored,” said Charu Chanana, head of currency strategy at Saxo in the Reuters report.

A potential pivot may come only at the Nov. 5 meeting, depending on further labour market data and the Q3 CPI report.

Meanwhile, Japan’s Nikkei Index saw the largest early trading movement, jumping 1.4% to hit a near three-week high.

Investors were keenly awaiting a speech by Bank of Japan Governor Kazuo Ueda, which is expected to provide more insights into the central bank’s next steps.

In the US, stocks closed slightly higher on Monday as traders continued to digest the Federal Reserve’s recent decision to cut interest rates.

Markets remain divided on whether the Fed will cut rates by 25 or 50 basis points in its next meeting.

The CME FedWatch tool showed that markets were pricing in 76 basis points of easing by the end of the year.

Brown Brothers Harriman Senior Markets Strategist Elias Haddad, however, expressed caution.

“The market is overestimating the Fed’s capacity to ease,” Haddad said.

However, it will likely take strong US jobs data to trigger a material upward reassessment in Fed funds rate expectations.

The next critical data point will be the US non-farm payrolls report, due on October 4.

Until then, Haddad believes that a dovish Federal Reserve and strong economic fundamentals will maintain market sentiment and continue to weaken the dollar.

Dollar under pressure, oil prices edge higher

The US dollar remained under pressure as global risk sentiment improved.

The dollar index, which tracks the greenback against six major currencies, was at 100.95, hovering near a one-year low of 100.21 reached last week.

The Japanese yen held steady at 143.65 per dollar, while the euro was also little changed at $1.11055.

The euro had dropped 0.5% on Monday after weak business activity data in the eurozone raised expectations for further rate cuts by the European Central Bank.

The Australian dollar dipped 0.15% to $0.6828 but remained close to the nine-month high it had touched on Monday.

In commodities, oil prices saw slight gains in early trading. Brent crude futures rose 0.26% to $74.09 a barrel, and US crude futures were up 0.3% to $70.60.

Oil prices had slipped on Monday due to concerns over weakening demand and poor economic data from Europe, but they stabilized as trading progressed.

Asian stocks are experiencing a surge as China’s economic stimulus measures take effect, though the future remains dependent on upcoming central bank decisions in Australia, Japan, and the US.

The pressure on the US dollar continues as investors navigate the broader economic outlook.

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Geopolitics currently holds the highest risk and is more important for mankind than interest rates in Japan and the United States, JPMorgan CEO Jamie Dimon said in an interview.

Speaking to The Economic Times, Dimon expressed concerns regarding the conflict situation worsening in Ukraine with the Houthi attacks on American ships among other incidents also posing significant danger.

On a question about the US and Japan moving in opposite directions on rates, the yen carry trade, and if the worst was behind us, Dimon said:

I think a lot of that trade has been unwound. It worked for a very long time, and obviously it won’t work if rates are going up in Japan. I wouldn’t call that a risk, I think the real risk I look at now is geopolitical stuff. That dwarfs all other things. And to me, geopolitics is far more important for mankind than interest rates in Japan and the United States.

On Ukraine, Houthi attacks, and oil supply

“Ukraine has gotten worse. The missiles and the bombardment are getting worse. Iran, the Houthi attacks on American ships in the Red Sea. These are very dangerous situations,” Dimon said.

On a question that despite the geopolitical situation, oil prices were falling, Dimon said the commodity was in oversupply today but there was likely to be an undersupply a year or two later.

Oil and gas prices are set by supply and demand. It also include sentiment and inventory. So put it all together, it’s in oversupply today. Europe had to change their flow due to Ukraine.

He said this was a great lesson when we talked about the importance of safe, secure, reliable, affordable energy.

“If you look down the road, there’ll probably be undersupply of oil. That’s maybe a year or two away,” he said.

On talk of recession in the US, Europe, and slowdown in China

Dimon said it was possible for China to recover and pick up from the kind of slowdown it was witnessing.

However, he expressed confidence in India and America.

Dimon said:

Obviously, China’s slowed down. But will they kind of recover and pick up? Possibly. But India is doing well. America continues to do well. We haven’t seen anything like that for a couple of years. I’ve never seen people perfectly pick the inflection points of the economy.

Underscoring the complexities of an economy, Dimon added,

“The economy is a very large, complex, multi-faceted beast. For example, JPMorgan moves $10 trillion a day.

Investors are making decisions, every single day, people are going to work, sending kids to schools and buying food – that’s what drive the economies.”

On India’s performance and its ambition to be a $7-trillion economy

Dimon acknowledged that India was performing better than most (countries).

“I think you guys here have done a fabulous job at that,” he said.

He listed the Aadhar system, banking accounts, GST reforms, national infrastructure development and reduction in regulations as key factors boosting the country and helping the lower-income population, in addition to the wealthy.

Asked about his take on India’s ambition to be a $7 trillion economy in relation to the country’s financial markets, Dimon said the prospects for the same happening were “very bright”.

To give you a bit of perspective, my first trip to India, was in 2005. I had just become the CEO of JPMorgan. And I went to a small building in the old financial district. And I think we did research on 15 or 20 companies. Today, we do research on close to 140 companies which helps educate the world about Indian companies.

He highlighted how JPMorgan banked 850 multinationals in India and has close to 55,000 people in the Corporate Centre supporting global operations and technology.

“It’s engineering, cyber, tech, data, AI. We are building out a robust payment systems here for clients . And all these things you’re doing are gonna make you grow more. And it’s achievable. And you need strong leadership, as you have with PM Modi,” he said, disregarding the impact of the ruling party’s reduced majority in the government on the way he sees India.

“The government, democracy is that way, right? So any democracy you operate in, you have to understand it may move around a little bit, like American democracy,” he said.

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