For stock movements, a meeting with Donald Trump, now that he is president, is, apparently, the new tweet.
On Tuesday, shares of Fiat Chrysler (FCAU) zoomed off after its CEO Sergio Marchionne attended a breakfast meeting President Trump, along with the leadership of three of America’s top car manufacturers, which also included Ford (F) and General Motors (GM). The shares of all three automakers rose after the meeting, but Fiat outpaced the bunch, up nearly 7% by mid-afternoon to $10.94.
The president has repeatedly stated that he will kick start a resurgence in manufacturing in the U.S. and will create an inviting atmosphere for businesses. Auto makers could be a big part of that. And investors took notice of President Trump’s promise to make things easier on car manufacturers by substantially cutting taxes and rolling back environmental regulations. Fiat Chrysler stands to especially benefit from relaxed environmental standards. It’s lineup skews more toward trucks, Jeeps, and other gas guzzling vehicles than the other U.S. car manufactures.
The rise in investor interest in Fiat Chrysler comes at a good time for the company. Earlier this month, its stock fell about 16% to 9.49 after the EPA accused the carmaker of using secret software in its diesel-powered Jeep Grand Cherokees SUVs and Ram pickup trucks that enabled the vehicles to emit higher-than-allowed levels of nitrogen oxides for three years. In total, the software enabled more than 100,000 cars to spew excess pollution into the air. Earlier this month, Volkswagen, which was embroiled in a similar emissions scandal involving 500,000 vehicles in the U.S., agreed to pay $1.67 billion to settle civil suits brought by its dealerships. A fine from the government is still pending, which is also expected to run in the billions of dollars. Although Fiat Chrysler’s indiscretion is on a scale several times smaller than Volkswagen’s, investors should still expect a significant penalty should the charges hold up. Ultimately, though, the size of any fine could vary greatly depending on how aggressively President Trump follows through on his promise to ease environmental measures.
Fiat Chrysler’s quarterly earnings report is set to come before the opening bell on Thursday.