Live news updates from March 28: Dimon to be deposed in Epstein lawsuits, Alibaba to split into six

Mike Pence must testify to a grand jury about conversations he had with Donald Trump relating to the former president’s attempt to overturn the results of the 2020 presidential election, according to a person familiar with the matter.

Judge James Boasberg in the US District Court for the District of Columbia ruled that Pence, Trump’s former vice-president, would need to comply with a subpoena in the US Department of Justice probe into whether Trump committed any federal crimes in the aftermath of the 2020 election, including January 6 2021, when mobs of his supporters attacked the US Capitol and interrupted the certification of Joe Biden’s victory.

However, Pence does not have to answer specific questions pertaining to his actions on January 6 itself, when the then vice-president was acting as president of the US Senate and overseeing the electoral college certification process, the person familiar with the matter said on Tuesday.

Read more about the DOJ probe here

Canada is promising substantial tax credits to businesses that extract and process critical minerals in its federal budget, which is projected to create a C$40bn ($29.4bn) deficit in the 2023 fiscal year.

The budget, released on Tuesday, allots more than C$4.5bn over five years to companies in the clean technology sector, through a 30 per cent tax credit for investments in equipment used to manufacture and process critical minerals like lithium and nickel, which are crucial elements in electric vehicle manufacturing and other sectors. Chinese companies currently dominate the electric vehicle battery market.

The budget, headlined by a new dental care plan, also aims to push down credit card fees and raise taxes on banks and insurers.

Lucid Motors, a Bay Area luxury electric vehicle maker founded by former Tesla executives, said on Tuesday that it would cut 1,300 jobs in a major restructuring to contain costs as it struggles to meet growth targets.

“Our US workforce will see reductions in nearly every organization and level, including executives,” chief executive Peter Rawlinson wrote to staff in an email titled “Difficult News Today.”

Rawlinson announced the move during an all-hands meeting, saying the company would be forced to lay off 18 per cent of its workforce.

Lucid said the plan will incur a one-time charge of $24mn to $30mn.

Italy’s rightwing government has approved a draft law that would ban domestic production of lab-grown meat as it seeks to protect the country’s traditional culinary heritage and powerful agribusiness interests.

The draft law, which must still be approved by parliament before it can take effect, prohibits the cultivation of meat from cells in Italy, though it said it would not restrict imports of lab-grown meat produced elsewhere in Europe.

Italy’s minister of agriculture and food sovereignty, Francesco Lollobrigida, said the prohibition was needed to “guarantee quality, well being, and the protection of our culture, our tradition.” Violators face the prospect of heavy fines up to €65,000, and the potential shutdown of their factories.

The draft law has been endorsed by Italy’s agribusiness association, Coldiretti.

Lululemon gave a rosier earnings outlook for the year ahead than Wall Street expected, sending shares of the yogawear maker more than 12 per cent higher in after-hours trading.

The company said it expects earnings in fiscal 2023 to be between $11.50 and $11.72 a share and revenue to be between $9.3bn and $9.41bn. Analysts expected earnings of $11.47 a share on revenue of about $9.1bn.

Lululemon on Tuesday reported fourth-quarter revenue and adjusted earnings that topped Wall Street forecasts, and said its “strong results” were, in part, due to “strategic market expansion”. The company also predicted rosier results in its current quarter than analysts expected.

Jamie Dimon, the longtime chief executive of JPMorgan Chase, will be interviewed under oath over his bank’s decision to retain the late sex offender Jeffrey Epstein as a client, according to people familiar with the matter.

The sworn deposition, due to take place behind closed doors in May, is the latest development in two high-profile cases brought against the largest US bank by an alleged Epstein victim and the US Virgin Islands, where the disgraced financier had a home.

The lawsuits claim that JPMorgan, which banked Epstein for 15 years from 1998 to 2013, benefited from human trafficking and ignored several internal warnings about their client’s illegal behaviour. The lender has described the claims as meritless.

Read more on the planned deposition of Jamie Dimon here

A US judge has dealt a blow to Apollo Global Management, Angelo Gordon and other big creditors in the bankruptcy of mattress maker Serta Simmons Bedding, in a ruling that could settle a fierce dispute on Wall Street.

Federal bankruptcy judge David Jones in Houston dismissed arguments by Apollo and Angelo Gordon that they had been unfairly frozen out of a controversial $875mn loan refinancing Serta Simmons executed in 2020.

The slim majority of lenders that participated in the deal were able to swap their debt into more senior loans, giving them higher standing in the bankruptcy, while Apollo and Angelo Gordon were not. The so-called uptier exchange included $200mn of new cash lent to Serta to keep it afloat during the coronavirus pandemic.

Read more on the bankruptcy ruling here

Kate Forbes, Scotland’s finance secretary, will leave the devolved government and return to the backbenches after losing a close battle against Humza Yousaf for the leadership of the Scottish National Party, a person on her campaign said.

Forbes spoke to Yousaf on Tuesday and told him she did not wish to be considered for a cabinet position “at this time”, the person said, describing the discussion between the rivals as “amicable”. Yousaf won 52 per cent of SNP’s members vote, with Forbes getting 48 per cent.

The BBC reported earlier that Yousaf had offered Forbes a position as rural affairs secretary, which it said would have been a “major demotion” for her.

US insurers last year suffered their worst underwriting performance since 2011, and firms are being “hammered by increasing input costs, natural catastrophes, legal system abuse, and resistance in some states to adequate rates”, a trade body has said.

Estimates published by the American Property Casualty Insurance Association and risk modelling firm Verisk on Tuesday showed that US property and casualty insurers took a $26.9bn net underwriting loss in 2022, due to big payouts including Hurricane Ian, compared with $3.8bn a year earlier. After a big contribution from investments, the insurers’ net income was calculated to have fallen by around a third to $41bn.

Robert Gordon, senior vice president at APCIA, said insurers were “faced with a significant challenge to close the rate gap in order to meet their growing cost of capital”.

The US has told Russia that it would not provide Moscow with nuclear data that is meant to be exchanged twice a year under the New Start treaty after Russia suspended its participation in the agreement.

A White House National Security Council spokesperson said on Tuesday that Washington considered Russia in violation of its obligations under the New Start treaty, triggering the decision.

“As a lawful countermeasure intended to encourage Russia to return to compliance with the Treaty, the United States will likewise not provide its biannual data update to Russia,” the NSC spokesperson said.

Read more on the US decision here

Two non-executive directors have quit Liontrust over a row about the chair’s 12-year tenure on the board of the asset manager.

The FTSE 250 fund group announced on Friday that Emma Howard Boyd and Quintin Price had stepped down immediately without giving a reason for their departure.

However, people familiar with the situation said they decided to leave after raising concerns about the chair’s length of service on the board.

Alastair Barbour, who became non-executive chair nearly four years ago, has been on the board since April 2011, taking his tenure to 12 years. The UK’s corporate governance code recommends that chairs stay on the board for no longer than nine years, which starts when the person first joins the board.

Liontrust, Howard Boyd, and Price declined to comment.

Read more on the departures at Liontrust here

US consumer confidence held up better than expected in March against the backdrop of several bank failures and debate about the outlook for interest rates.

The Conference Board’s consumer confidence index rose to 104.2 in March from 103.4 a month earlier. Analysts had expected a decline. The cut-off date for the latest survey was March 20, 10 days after the failure of Silicon Valley Bank, which triggered broader concerns about the banking system.

Within the survey, the sub-index tracking consumers’ assessment of current business and labour market conditions decreased. The sub-index tracking consumers’ short-term outlook for income, business and the labour market improved slightly, but the Conference Board said this indicator remained at a level that typically signals a recession within the next year.

Brent Hoberman’s Founders Forum has agreed to take over Tech Nation, the UK industry lobby group that is being forced to shut after government funding for its schemes ended.

The government created Tech Nation in 2014 to boost the UK’s technology industry through growth programmes for start-ups. It also processed visas for tech employees on behalf of the UK’s Home Office.

Tech Nation’s team will accept new global talent endorsement applications until a replacement body is set up.

The long-term future of the visa scheme is yet to be decided but it is likely that the Founder Forum will take over the operations, according to a person close to the talks.

The US has accused former FTX chief executive Sam Bankman-Fried of paying a $40mn bribe to one or more Chinese government officials.

In a revised indictment filed in the Southern District of New York, prosecutors accused Bankman-Fried of sending the bribe in cryptocurrency to Chinese officials in order to regain access to trading accounts that had been frozen by Chinese law enforcement. The accounts were linked to Alameda Research, FTX’s sister company.

The new bribery charge added to the 12 counts already faced by the former FTX chief since the collapse of the cryptocurrency exchange last November.

Read more on the bribery charge against Bankman-Fried here

TV sports presenter Gary Lineker has won an appeal against HM Revenue & Customs over a £4.9mn tax bill surrounding allegations that he was a “disguised employee” of the BBC and BT Sport.

In a case made public on Tuesday, a judge ruled that the Match of the Day host was a freelancer who had direct contracts with the two broadcasters, for work carried out between 2013 and 2018.

The tribunal Judge John Brooks said the intermediaries legislation (IR35) did not apply to the case because of those direct contracts.

HMRC said: “We do not agree with its decision that the rules cannot apply in this case and we’re considering an appeal.”

US home prices fell for the seventh consecutive month in January as high mortgage rates continue to weaken housing demand.

Prices in 20 cities fell 0.4 per cent in January from December, just missing analyst expectations for a 0.5 per cent decline. The index reported a 2.5 per cent annual increase, slowing from 4.6 per cent in December.

Despite recent turmoil in the banking industry, the Federal Reserve has remained committed to raising interest rates to combat persistent high inflation. As a result, “mortgage financing and the prospect of economic weakness” will probably remain a headwind for house prices for the next several months, said Craig Lazzara, managing director at S&P Dow Jones Indices.

Canada’s Intact and its subsidiary RSA are quitting the UK consumer motor insurance market, giving up £120mn in annual premiums, after bad weather and inflation fuelled claims costs.

Intact said on Tuesday that the UK market “remains extremely competitive and requires significant scale to drive meaningful outperformance”. RSA, whose UK brands include More Than, was taken over by Intact in 2021. It will keep its home and pet insurance products.

In the fourth quarter, the group’s UK and International personal insurance business posted a combined ratio — claims and expenses as a proportion of premiums — of 120.8 per cent, representing an underwriting loss.

Profits at pharmacy chain Walgreens Boots Alliance dropped in the third quarter, as demand for Covid-19 tests and vaccines plunged.

The Illinois-based retailer reported earnings per share of 81 cents in the three months to February. That was down by a fifth from a year ago because of a sharp decline in demand for Covid-19 related products.

On Monday, vaccine producer BioNTech forecast a big drop in Covid-19 vaccine sales from €17bn in 2022 to €5bn in 2023.

At least 39 people were killed and another 29 injured after a fire swept through a migrant detention centre in a Mexican city located close to the US border on Monday night.

Mexico’s National Migration Institute (INM) said that 68 adult men from Central and South America had been staying at its facility in Ciudad Juarez, just south of El Paso, Texas when the blaze broke out just before 10pm local time in the accommodation area.

The authorities have opened an investigation into the cause of the fire.

Migration from Central and South America through Mexico towards the US has been running near the highest levels in 20 years, driven by economic hardship and political repression. Venezuela, Cuba and Nicaragua are the sources of much of the recent migration.

The UK’s MI5 intelligence agency has increased the terrorism threat level in Northern Ireland to “severe”, meaning an attack is “highly likely”, reversing a decision a year ago to reduce it for the first time in 12 years.

The status change, from “substantial”, comes ahead of the 25th anniversary on April 10 of the 1998 Good Friday Agreement that ended Northern Ireland’s conflict. US President Joe Biden is due to visit in the coming weeks.

Chris Heaton-Harris, the UK’s Northern Ireland minister, said the public “should remain vigilant but not be alarmed”.

He noted that a small number of people were still engaged in “politically motivated violence”.

Northern Ireland will have to repay a £297mn loan to the UK Treasury in the financial year starting in April after overspending following the collapse of the Stormont political institutions in a row over Brexit.

The Northern Ireland Fiscal Council watchdog said that would translate to a fall in real departmental spending by 6.4 per cent, ratcheting up pressure on public services.

“NI departments confront the coming financial year with no ministerial leadership, no agreed budget allocations . . . and a tough financial environment as pay increases and inflation remain elevated, and this year’s call on the Treasury reserve has to be repaid,” it said.

London will set a new budget soon unless the Democratic Unionist party ends its boycott of Stormont.

Investigators searched the offices of several large banks in Paris on Tuesday, including BNP Paribas, Société Générale and HSBC, in the first French raids connected to the so-called “cum-ex” tax evasion scandal.

The raids were linked to five preliminary investigations launched in 2021 on alleged money laundering and fiscal fraud charges, France’s financial prosecutor’s office said in a statement.

The cum-ex scandal, which has led to raids and investigations in Germany, is centred around the alleged evasion of taxes and fraudulent scheme around dividend payments.

Natixis and Exane, the brokerage owned by BNP Paribas, were also targeted by the raid, a spokesperson for the prosecutors’ office added.

Alibaba plans to separate its six main businesses into independent units as the Chinese technology group seeks to bolster its share price.

Each unit will be led by a separate chief executive and board, while embarking on their own capital raising or public offerings, Alibaba said in a public letter.

Rival JD.com has taken similar steps. It has retained a controlling stake in a diverse set of businesses that have gone on to raise outside capital, with several eventually listing in Hong Kong.

New York-listed shares in Alibaba gained as much as 6.7 per cent in pre-market trading following the statement.

Silicon Valley Bank: Officials from the Federal Reserve, Treasury department and Federal Deposit Insurance Corporation will testify to the US Senate banking committee on the collapse of Silicon Valley Bank and Signature Bank. On Monday, the Fed’s top official Michael Barr blamed the collapse of SVB on a “textbook case of mismanagement”.

Earnings: Lululemon is expected to report fourth-quarter revenues rose 26.8 per cent to $2.7bn. Elsewhere, Walgreens Boots Alliance reports before the opening bell, while chipmaker Micron reports results after market close.

Economic data: The pace of US home price growth is expected to have slowed in January, with prices forecasted to have fallen for the seventh consecutive month, by 0.5 per cent from December, according to a Refinitiv poll.

Greece has pinned its national election date to May 21, the prime minister announced as he reaffirmed a commitment to completing his four-year term, which ends in July.

“The country and its citizens need clear horizons,” Kyriakos Mitsotakis said on Tuesday during a televised cabinet meeting.

Greece’s use of proportional representation will make it hard for a single party to form a government.

A second semi-proportional representation ballot would be expected at the latest by the beginning of July.

New Democracy, the ruling center-right party, leads in the polls but this month’s fatal train collision, the worst in Greece in decades, have dented its popularity.

The latest polls showed a drop in New Democracy’s margin to around 3 points over the leftist Syriza.

Bank of England governor Andrew Bailey has dismissed a recent slide in European bank shares as markets “testing out” lenders rather than a sign of weakness in the financial services sector. 

Bank stocks, led by Germany’s Deutsche Bank, on Friday dragged down Europe’s Stoxx 600 banks index.

“I would not want to say that those [falls] in my estimation are based on identified weakness,” Bailey told the cross-party Treasury select committee on Tuesday, adding that “there is quite a bit of testing out going on at the moment”.

Bailey stressed that the BoE would be “very vigilant” to risks even though his “strong view” was that UK banks were resilient.

Big share moves on the European stock exchanges include infrastructure company Alstom, IT group Softcat and chemicals business Synthomer:

• Shares in Softcat rose 5 per cent after the London-based IT group posted £63mn in operating profit for the six months to January 31, ahead of initial expectations. The group added its full-year performance would beat previous estimates.

• Alstom shares rose 1.5 per cent after the French railway infrastructure group said it had won a contract to provide Hong Kong with more signalling for its public transport network.

• Synthomer shares slid 13 per cent to the bottom of the Stoxx 600, after the UK chemicals group said its performance reflected “challenging macroeconomic conditions” at the end of last year and noted “subdued” demand across most of its markets.

European equities advanced on Tuesday as investors turned cautiously optimistic that the worst of the recent banking crisis was over.

The Stoxx Europe 600 Banks index, which includes the region’s biggest lenders, rose 1.5 per cent. Commerzbank led gainers, up 2.6 per cent.

The moves bolstered broader share indices, with the benchmark Stoxx 600 up 0.4 per cent and Germany’s Dax up 0.6 per cent.

US bank stocks finished higher overnight in New York as investors welcomed news that regulators could enact more policies to support fragile confidence in banks. The KBW Nasdaq Bank index rose 2.5 per cent, with Citigroup up 3.9 per cent.

Read more from the Markets Briefing here

Humza Yousaf must revive Scotland’s independence campaign and bridge party divisions, senior Scottish National party officials have said, as the incoming leader prepares to become first minister.

“We’ve got a general election coming,” said MP Ian Blackford on Tuesday. “He needs to make sure he re-energises the independence campaign.”

Stephen Flynn, the party’s Westminster leader, told Sky News being “team SNP” was “the important thing” and what the party and public expected of the 37-year-old leader.

Blackford said Yousaf would need to bring the party together, adding that he was “a tremendous team person” who would “pleasantly surprise” people.

Yousaf will be sworn in as first minister on Wednesday after a parliamentary vote on Tuesday.

UK grocery prices rose at a record pace this month to add £837 to the average household’s annual bill as a cost of living crisis held its grip on shoppers, according to market research.

Market researcher Kantar said prices at the supermarket increased at an annual rate of 17.5 per cent in March, the highest since records began in 2008, with steep increases in the prices of eggs, milk and cheese.

“Unfortunately, it’s more bad news for the British public, who are experiencing the ninth month of double-digit grocery price inflation,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

UK regulators have hit three businesses owned by betting group William Hill with a record fine for failing to protect consumers and weak anti-money laundering controls.

The Gambling Commission fined the businesses £19.2mn, revealing failures that were “so widespread and alarming” that “serious consideration” was given to licence suspension, it said.

However, since the operator immediately recognised its failings, the regulator opted for “the largest enforcement payment” in its history, it added.

Social responsibility failures at the gambling group included having insufficient controls in place to protect new customers.

The commission fined two operators last week a combined £7.2mn.

UK oil major BP has teamed up with the Abu Dhabi National Oil Company to launch a bid for Israeli natural gas group NewMed Energy.

Tel Aviv-listed NewMed, which has a market capitalisation of NIS8.6bn ($2.4bn) is majority owned by Israel’s Delek Group. BP said it planned to team up with Adnoc to buy the free float and part of Delek’s stake. Between them, BP and Adnoc would own more than 50 per cent of NewMed.

NewMed had been in merger talks with Capricorn Energy, but activists scuppered the deal. The proposed transaction with BP and Adnoc comes amid growing co-operation between Israel and some of its Middle Eastern neighbours.

Diageo has announced its chief executive Sir Ivan Menezes will step down after 10 years in the role.

The multinational drinks company, which owns brands including Guinness and Smirnoff vodka, said Sir Ivan will also leave the board this summer as he retires after having held a number of senior positions in the business since 1997.

Debra Crew, the group’s current chief operating officer will replace Sir Ivan in July and join the board.

Chair Javier Ferrán said: “Ivan leaves Diageo extremely well positioned for future growth, and we thank him again for everything he has helped us to achieve.”

Scotland: Humza Yousaf, who was elected leader of the Scottish National party on Monday, faces a parliamentary vote to become the country’s first minister.

Bank of England: MPs on the Treasury Committee question governor Andrew Bailey about the purchase by HSBC of Silicon Valley Bank UK.

Corporate earnings: Soft drink manufacturer AG Barr and energy consultancy Wood Group publish annual results. Property developer Bellway posts half-year numbers. Investment bank Jefferies publishes quarterly results. Online supermarket Ocado Retail and water company United Utilities are due to release trading updates.

The US and Japan will sign a new trade agreement for critical minerals needed for electric car batteries, a senior Japanese minister said on Tuesday.

Yasutoshi Nishimura, minister of economy, trade and industry, said the deal is expected to be signed later on Tuesday, paving the way for EVs made with metals processed in Japan to be eligible for tax credits under the Inflation Reduction Act, a landmark US climate, tax and spending law.

Whether Japanese EVs would be eligible for the massive US tax incentives had been a source of tension between the two countries as they seek to bolster economic security cooperation in securing chips and battery materials.

North Korean leader Kim Jong Un on Tuesday called for the country to expand its production of weapons-grade nuclear material, which he said should be available for use in weapons at any time.

Kim’s remarks came as he inspected the country’s new tactical nuclear weapons arsenal, as well as technology to mount warheads on ballistic missiles and its nuclear counterattack programmes, according to state-run media KCNA.

Kim ordered weapons-grade materials to be produced in a “far-sighted way” to increase its nuclear weapon supplies “exponentially”. The country has recently stepped up military provocations in protest at joint drills by the US and South Korea.

Asian equities advanced on Tuesday as investors became increasingly confident that the global banking sector turmoil could be contained.

Japan’s Topix and South Korea’s Kospi both gained 0.4 per cent, while Hong Kong’s Hang Seng index rose 0.6 per cent and China’s CSI 300 gained 0.2 per cent. The Topix Banks index rose 3 per cent.

US stocks diverged on Monday, with the S&P 500 adding 0.2 per cent and the Nasdaq Composite down 0.5 per cent.

The KBW Nasdaq Bank index rose 2.5 per cent after regulators confirmed First Citizens Bank would buy much of the collapsed Silicon Valley Bank.

Australian miner Liontown Resources on Tuesday rejected an offer valuing it at $A5.5bn (US$3.7bn) from Albemarle, the world’s biggest lithium producer.

News of the bid sent the shares in the group up more than 50 per cent.

Liontown said it had received the offer on Monday, following two lower bids in October and at the beginning of March. Its board said the bid “substantially undervalues” the company.

An Albemarle subsidiary has built a stake worth 2.2 per cent in the company via free-floating shares, Liontown added.

Liontown last year signed deals with Ford and Tesla to supply lithium for use in electric vehicles.

Boao Forum for Asia: The annual event, modelled on the World Economic Forum in Davos, kicks off on the Chinese island of Hainan and draws foreign investors and leaders.

Corporate earnings: Chinese electric vehicle maker BYD publishes annual results.

Markets: Futures in Japan and Hong Kong pointed higher on Tuesday after US equities diverged on Monday. The S&P 500 closed up 0.2 per cent and the Nasdaq Composite finished 0.5 per cent lower.

The European Commission will take an extra month to determine whether Italy has met the reform and investment obligations required to unlock the next €19bn tranche of its €200bn, EU-funded Covid-19 recovery plan.

Prime Minister Giorgia Meloni’s office said on Monday night she had agreed with Brussels to “extend the assessment” of Italy’s performance in the second half of 2022. That assessment was already delayed, but was previously expected to be complete by the end of March.

Italy, which is the largest recipient of funds from the EU’s €800bn Covid recovery plan, said Brussels had concerns about some projects from the previous government’s tenure, and wanted to reduce the planned duration of new port concessions.

Lyft co-founders Logan Green and John Zimmer announced they are stepping down from their roles running the company after recent evidence that the US ride-hailing service has lost more ground against arch-rival Uber.

Board member and early Amazon employee David Risher would take over from Green as chief executive on April 17, the company said, with Zimmer stepping down as president on June 30.

The management reshuffle comes two months after Lyft conceded that it would have to slash fares to stay competitive with Uber, denting its profit forecast for the latest quarter.

Lyft’s founders would retain a significant interest in the company, the ride-hailer said.

Shares of Tommy Hilfiger parent PVH surged 9 per cent in after-hours trading after the company provided a strong outlook for 2023.

The apparel group, which also owns the Calvin Klein brand, said it expected revenue to grow between 3 per cent and 4 per cent in 2023, and adjusted earnings per share of $10, compared with $8.97 in 2022.

PVH reported $2.49bn in revenue, about 5 per cent better than expected. It earned $138.7mn in net income, beating forecasts by more than 30 per cent.

The company said it expected to report $1.90 in adjusted earnings per share in the first quarter of 2023,

US equities were mixed on Monday, with bank stocks buoyed by investors looking beyond the turmoil that has rocked the sector in recent weeks.

The KBW Nasdaq Bank index rose 2.5 per cent, echoing moves in Europe, where a 6.2 per cent recovery in Deutsche Bank’s shares following Friday’s sharp declines led markets higher.

The gains in US bank shares came as regulators confirmed First Citizens Bank would buy much of the collapsed Silicon Valley Bank. The deal sent shares in First Citizens up 53.7 per cent.

Still, broader equity markets were uneven. The S&P 500 closed up 0.2 per cent and the Nasdaq Composite finished 0.5 per cent lower.

Read more on the day’s market moves here.