EU-US trade deal hits investor confidence; Tesla awards Elon Musk $30bn of shares

The Guardian

9 hours ago

Update:
Date: 2025-08-04T12:23:24.000Z
Title: Boom! Shares in lenders exposed to the UK car finance scandal have surged at the start of trading in London, as', 'investors react to Friday night's supreme court ruling.
Content: Rolling coverage of the latest economic and financial news, as shares in Lloyds and Close Brothers jump
Millions in line for payouts from £18bn car loan compensation scheme
Graeme Wearden
Mon 4 Aug 2025 14.23 CEST
First published on Mon 4 Aug 2025 08.18 CEST
From
9.13am CEST
09:13
Boom! Shares in lenders exposed to the UK car finance scandal have surged at the start of trading in London, as investors react to Friday night's supreme court ruling.
Shares in Close Brothers jumped 27% after the stock market opened, after the court ruled in its favour in a case over car finance. Close Bros are leading the FTSE 250 index of medium-sized companies.
Lloyds Banking Group is leading the larger FTSE 100 share index – its shares have jumped by almost 6% in early trading.
As flagged earlier, Lloyds had previously set aside £1.2bn to cover compensation claims over car finance commissions paid to car dealers.
These share price moves are a clear sign that the Supreme court ruling is a win for the lenders, even though the FCA is now consulting on a compensation scheme for motorists.
That's because the FCA estimates the cost of its scheme will be between £9bn and £18bn. Before the supreme court overturned two of the three rulings against the industry, lenders were facing an estimated bill of £44bn.
Updated
at 9.17am CEST
2.23pm CEST
14:23
Today's $30bn share award won't be the end of the discussions about Elon Musk's pay.
In their letter to shareholders, Robyn Denholm and Kathleen Wilson-Thompson explain that the Tesla board's special committee will continue its work on 'a longer-term CEO compensation strategy'.
They intent to put this plan to a shareholder vote at Tesla's annual meeting on 6 November.
1.50pm CEST
13:50
Shares in Tesla have risen by over 2% in pre-market trading – a sign that Wall Street approves of Musk's new share package.
They've risen by 2.3% to $309 per share, up from $302 on Friday night, which will lift the value of Musk's 96m share package closer to $30bn.
Investors may well be reassured that today's share package will keep Musk at Tesla, as the shares will vest in two year's time.
1.24pm CEST
13:24
Customer loyalty towards Tesla across America has plunged since CEO Elon Musk endorsed President Donald Trump last summer, according to data from research firm S&P Global Mobility.
The data shows Tesla's customer loyalty peaked in June 2024, when 73% of Tesla-owning US households in the market for a new car bought another Tesla, Reuters reports
Brand loyalty rate started to nosedive in July, the month when Musk endorsed Trump.
The rate bottomed out at 49.9% last March, after Musk launched the Department of Government Efficiency in January and started firing thousands of government workers.
S&P analyst Tom Libby called it 'unprecedented' to see the runaway leader in customer loyalty fall so quickly to industry-average levels, adding:
'I've never seen this rapid of a decline in such a short period of time.'
Tesla's US loyalty rate has since ticked back up to 57.4% in May.
But even so, this does raise the question about whether Musk really deserves $30bn of shares….
1.11pm CEST
13:11
Gwyn Topham
Eurostar passengers travelling and from Paris face long delays and cancellations after a power failure on the high-speed rail line north of the French capital.
The cross-Channel train operator warned that trains between London and Paris and Brussels and Paris would be disrupted throughout Monday.
It said trains were still running but had been rerouted via slower rail lines, adding up to two hours to departures on Monday morning. A number of afternoon services have been cancelled.
The latest disruption comes during peak holiday season, on the main rail route from Britain to the continent.
Eurostar said it advised passengers to postpone their journey if possible, and exchange their ticket free of charge or request a full refund. It said extra staff had been deployed in the stations to assist passengers.
12.50pm CEST
12:50
Just in: Tesla has awarded Elon Musk stock options worth almost $30bn, in its latest attempt to pump up the billionaire's pay packet, and keep him at the company.
Tesla had announced that is has approved an award of 96 million shares of restricted stock to CEO Musk, under its 2019 Equity Incentive Plan.
At Tesla's latest share price, $302, the shares would be worth $29bn. Musk would have to pay just $23.34 per share to get them, which would cost him around $2bn.
This follows the blocking off Musk's massive, $56bn, pay packet by a Delaware judge.
If the Delaware pay deal is reinstated (there's an appeal to Delaware's Supreme Court), these new share options will by immediately forfeited, Tesla add (a sign that it is an attempt to get Musk at least part of that offer).
Robyn Denholm and Kathleen Wilson-Thompson, members of the special committee of the Tesla's board of directors, told shareholders that it was 'imperative to retain and motivate our extraordinary talent, beginning with Elon'.
In a letter to shareholders, they added:
We would also like to stress that prior to recommending this award, we reviewed your letters, read your X posts, and considered the direct feedback we have received from many of you in order to align our recommendation with your expressed views. From those communications, we know that one of your top concerns is keeping Elon's energies focused on Tesla.
This award is a critical first step toward achieving that goal, although it is limited by the capacity of our current equity incentive plan. As such, we are also working on next steps to address that issue. Still, while our work remains ongoing, we feel it is important to communicate directly and transparently with you all, our shareholders and Tesla's owners.
Updated
at 12.56pm CEST
12.03pm CEST
12:03
The Swiss franc has weakened again this morning, adding to Friday's losses, as traders anticipate steep tariffs on Switzerland's goods at the US border.
The euro has climbed by almost 0.5% against the swiss franc, to 0.9355CHF.
Raffi Boyadjian, lead market analyst at Trading Point, says:
Many investors remain hopeful that some of the steep tariffs announced last week will be renegotiated and reduced. For example, reports suggest that Canadian Prime Minister Mark Carney will meet with Trump later this week to potentially reach a deal that would bring down the 35% levy on Canadian imports into the US.
The Canadian dollar is unchanged versus the greenback today, but the Swiss franc is tumbling following the White House's decision to slap 39% tariffs on Switzerland – something not expected by the Swiss government.
The yen, meanwhile, enjoyed a revival in its safe-haven status during Friday's risk-off trading, although it is paring those gains today, with the dollar rebounding to just below 148 yen.
11.39am CEST
11:39
Jean-Philippe Bertschy, an analyst at Vontobel, has warned that 39% tariffs on Swiss exports to the US would be 'devastating for numerous brands in Switzerland.'
11.27am CEST
11:27
Eurozone August Sentix -3.7 (est +6.9, last +4.5)
A bit of surprise from Sentix who is, however, just a survey of analysts.
The index's setback suggests still a sub-50 Composite PMI and while I don't read too much into today's data, it confirms that recovery remains fragile. pic.twitter.com/MacXwOZq0o
10.50am CEST
10:50
Investor sentiment in the euro zone has taken a tumble, as the EU-US trade deal annnounced a week ago dampened confidence.
Data provider Sentix's latest confidence gauge found that investors are not impressed by the EU's latest tariff deal with the US.
The survey of 1,050 investors, conducted from July 31 to August 2, found a decline in the current economic situation, and also in future expectations.
It also found a slump in confidence about the Swiss economy, after Donald Trump announced Switzerland will face a 39% tariff – much higher than the EU's 15%.
Sentix reports:
The latest data from the 'first mover' provides investors' initial assessment of the EU-US tariff deal. And the result is devastating for the eurozone. The sentix economic index has fallen significantly to -3.7 points. The current situation and expectations are both declining. The wrinkles of concern in the economy are deepening again.
Even German Chancellor Friedrich Merz, who recently raved about a turnaround in the economy, has been proven wrong: the Germany index has collapsed by more than 12 points to -12.8 points.
Donald Trump and the US are the winners in the current figures. Advance effects are the main factor pumping up the situation figures. However, expectations are also falling in the US to -7.8 points. Investors are particularly harsh on the Swiss economy. The sentix economic index has slumped by a full 21.2 points here.
Sentix managing director Manfred Huebner says:
'The tariff agreement is proving to be a real mood killer.'
Updated
at 10.53am CEST
10.43am CEST
10:43
Swatch group chief executive Nick Hayek has called on Swiss President Karin Keller-Sutter to meet US President Donald Trump in Washington to negotiate a better deal than the 39% tariffs announced on Swiss imports into the United States.
Hayek told Reuters on Monday he was confident an agreement could still be reached before the tariffs, which were announced on Friday, went into effect on August 7.
Hayek said:
'Karin Keller-Sutter is the boss of the Swiss government, she is the president.
She should take the plane and go to Washington. That would increase the chances of a deal enormously.
'It's not doomsday. Of course a settlement can be reached. Why would Donald Trump say tariffs are coming on August 1 and not implement them until the 7th? The door is always open.'
10.42am CEST
10:42
The Swiss stock market has tumbled into the red after Donald Trump shocked Switzerland by announcing a 39% tariff on its imports to the US.
The Swiss Main Index (SMI) is down over 1%, after losing almost 2% at the start of trading. The market had been closed on Friday for a public holiday, so this is Zürich traders' first opportunity to react.
Most stocks are in the red, including pharmaceuticals firm Roche (-1%), luxury goods maker Richemont (-0.8%), and bank UBS (-1.8%).
Economists have warned that the tariffs would have a serious impact on the export-oriented Swiss economy, increasing the risk of recession.
10.23am CEST
10:23
South Africa's FirstRand has said it may need to update its accounting provisions after Friday's supreme court ruling on motor finance claims, potentially pushing the lender's annual earnings growth towards the lower end of its forecast.
It told shareholders:
On 11 December 2024, FirstRand Bank London Branch obtained permission from the Supreme Court to appeal the UK Court of Appeal's judgment against it in respect of the Wrench and Johnson motor finance commissions cases. The appeal was heard by the Supreme Court between 1 April 2025 and 3 April 2025.
FirstRand welcomes the clarity provided by the judgment. FirstRand Bank London Branch's main ground of appeal (that car dealers do not owe their customers a fiduciary duty) was upheld, and it is important to note that the successful ground was the most important and substantive issue that required the Supreme Court's consideration following last year's UK Court of Appeal ruling.
The company had earlier expected to deliver full-year earnings growth in the low double-digit to mid-teens range, Reuters reports.
Shares in FirstRand are up 4.7% this morning, on the Johannesburg stock exchange.
Updated
at 10.31am CEST
10.02am CEST
10:02
The trade body for the motor finance sector has criticised the Financial Conduct Authority for proposing to backdate its compensation scheme to 2007.
Stephen Haddrill, director general of the Finance & Leasing Association, told Radio 4's Today programme that while it 'makes sense' to have a compensation schem, there rae 'major concerns' about the time limit.
Haddrill argued:
I just think it's completely impractical.
It's not simply firms that don't have the details about contracts back then, customers don't either.