Squawk Box Europe Express

We have a slew of European corporate earnings this Super Thursday including Deutsche Bank, Roche and Santander, ahead of key central bank decisions. Stateside, the Federal Reserve slows the pace of rate hikes to deliver its smallest increase in a year. Chairman Jerome Powell hints that the central bank will again hike in March despite signs of cooling inflation. We await interest rate decisions from the BoE and the ECB later today as euro zone inflation eases for a third consecutive month.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Struggling tech stocks surge on the Nasdaq, helping the index to its best yearly start since 2001. The S&P 500 also enjoys its best January in four years. The private Caixin survey shows Chinese factory activity shrinking for a sixth consecutive month, which contrasts more optimistic government figures. Snap shares are in the red in extended trade as falling digital advertising spend weighs. Meta shares are also down ahead of its Q4 earnings due out later today. Paris sees huge demonstrations against President Macron’s pension reforms as a number of countries brace for industrial action on Wednesday. The UK will see its biggest mass walkout in 12 years.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Markets in Asia follow Wall Street downwards as cautious investors brace for a slew of tech earnings and central bank moves later this week. Swiss lender UBS posts a 23 per cent surge in Q4 net profit, beating bottom-line expectations. China’s economy swings back to growth as disruption fears following the country’s emergence from strict Covid restrictions fade. The IMF hikes its global economic outlook for the first time in a year with the UK lagging behind among developed economies. Speaking to CNBC, the IMF’s chief economist, Pierre-Olivier Gourinchas urges vigilance. And we are live at the annual Baker Hughes meeting in Florence. The company has announced a new exploration partnership with Fortescue Future Industries.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

As the week-long Chinese Lunar New Year holiday ends and trade restarts, the CSI 300 index nears bull market territory. Renault and Nissan are set to announce the details of their restructured tie-up. Renault is to slash its stake in the Japanese car maker down to 15 per cent. Oil is up on optimism following the end of the Chinese New Year. BP, however, is bearish on the demand outlook and has pared back its long-term guidance. American, Dutch and Japanese authorities are moving closer to a deal which would restrict China’s ability to buy advanced chip technology.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. markets are up following a slew of economic data and Q4 earnings. Tesla helps bump the Nasdaq up by almost 2 per cent. The American economy grows more than expected in the final quarter of 2022 with hopes that the Federal Reserve can attain a ‘soft landing’. President Biden hails the numbers, saying it proves his economic plan is having a positive effect. Russia launches attacks on several Ukrainian cities following Kyiv’s securing of heavy tank deliveries from Western allies. Luxury giant LVMH posts record FY profits for the second year running, welcoming the return of Chinese high-end shoppers.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla posts a Q4 earnings and revenue beat on both the top and bottom lines, causing the stock price to surge. CEO Elon Musk says price cuts for Tesla cars have boosted demand. In Hong Kong, the Hang Seng moves almost 2 per cent as it kicks off the Chinese New Year of the Rabbit. In Japan, the Nikkei is down as BoJ minutes reveal division about the country’s inflation. The U.S. and Germany sign off on delivery of Abrams and Leopard tanks to Ukraine with Presidents Biden and Zelenskyy both hailing the moves as crucial in countering Russian aggression. And investors are bracing for U.S. GDP figures out later today as forecasts put Q4 growth at 2.4 per cent.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Microsoft stutters in extended trade after it posted the slowest quarterly revenue growth since 2016. The NYSE suffers a technical glitch which stops trade in 251 stocks. Several trades will now be cancelled. Markets closed mixed but the Dow posted its third consecutive session in the green. Tesla CEO Elon Musk tells a California jury he was not bound by any commitments in 2018 when he tweeted he had secured the funds to take the EV maker private. Returning South Korean stocks help push Asian markets to a seven-month high but Australia equities disappoint with inflation hitting a 33-year high. And following months of discussions, the U.S. and Germany are reportedly set to deliver Abrams and Leopard tanks to Ukrainian forces.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. equities rally lead by tech stocks as the market anticipates a 100 per cent chance of the Federal Reserve paring back next week’s rate hike to 25bps. Audio streaming giant Spotify is to announce job cuts of up to 6 per cent as Google boss Sundar Pichai says he had to act decisively in the face of faltering growth. Qatar’s investment arm has upped its share of Credit Suisse as the lender turns to the Middle East to help fund its restructuring strategy. There are growing calls from Kyiv and various EU capitals for Germany to green-light its Leopard tank deliveries. NATO Secretary-General Jens Stoltenberg is to hold talks with new German defence minister Boris Pistorius today.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The IMF hints it may upgrade the global growth outlook for the year as the economic forecast shows early signs of brightening. Speaking during a CNBC panel at the World Economic Forum in Davos, managing director Kristalina Georgieva warned that rising rates could still hamper an upturn. The dollar falls on expectations of less aggressive Fed rate increases while the euro hits a nine-month high after ECB President Christine Lagarde tells CNBC there are more 50bps hikes to come. Tech stocks are in focus ahead of earnings this week after the Nasdaq posts its third consecutive week of gains. In China, a major Covid exit wave looks unlikely as up to 80 per cent of the population has already been infected, according to top scientists. German Chancellor Olaf Scholz and French President Emmanuel Macron meet in Paris and vow closer EU ties in the face of greater economic competition from the U.S. and geo-political threats from Moscow.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at http

Japanese inflation hits a 41-year high of 4 per cent last month, which is twice the BoJ’s target as the central bank sticks with its ultra-loose policy. We hear from Dutch Prime Minister Mark Rutte who says he does not believe the U.S. IRA was intended to hurt EU economies but the move has impacted businesses within the bloc. U.S. markets are in the red for the week as jitters over the Federal Reserve’s rate path dampens sentiment. Activist Greta Thunberg slams WEF policy makers for not prioritising climate concerns. And in crypto news, lender Genesis officially files for bankruptcy, holding liabilities of $11bn.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

There are renewed U.S. recession fears following weaker-than-expected retail and PPI data. Wall Street plunges into the red while the 10-year Treasury yield hits its lowest level since September. Goldman Sachs CEO David Solomon, however, tells CNBC he believes sentiment is softening and is hopeful of a softer landing both Stateside and in Europe. Several Fed officials, including James Bullard and Loretta Mester say the U.S. policy rate should top 5 per cent during a new round of hawkish commentary. We speak to new Credit Suisse CEO Ulrich Koerner who says the bank’s business restructuring strategy is progressing smoothly as the lender scrambles to retain its top staff. And in crypto news, lender Genesis is set to file for bankruptcy while U.S. officials detain the founder of the Bitzlato exchange for allegedly handling more than $700m in illicit funds.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Stocks in Japan surge as the yen posts its worst session in almost three years and the JGBs fall back as the BoJ insists it will continue its yield curve control procedure. We hear from Polish President Andrzej Duda who says that Russian President Vladimir Putin is on the back foot in Ukraine, calling on allies to further increase support for the nation. German Finance Minister Christian Lindner tells this channel that a trade war with the U.S. must be avoided and that Brussels should work hand-in-hand with Washington to combat inflation. In banking news, Goldman Sachs posts its worst profit miss in almost ten years with rival Morgan Stanley also underperforming. However, U.S. bank CEOs in Davos predicted a more gentle recession this year. Chinese Vice Premier Liu He is set to meet with U.S. Treasury Secretary Janet Yellen in Zurich as Beijing reports a steady increase in full-year FDI.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-inf

Chinese annual GDP has come in at its second-worst rate since the Cultural Revolution, growing at only 3 per cent – well below its official 5.5 per cent target. The country’s population also contracted for the first time in six decades. We hear from Spanish Prime Minister Pedro Sanchez who says the EU should follow the U.S. lead on fighting inflation and that he hopes a trade war could be avoided. The World Economic Forum kicks off in its annual winter slot for the first time since 2020 in Davos. ‘Polycrisis’ and fragmentation risks are two central themes this year as the IMF warns the developing world is falling behind. Up to two-thirds of global economists are braced for recession within a year while CEO confidence has fallen to a more than 10-year low. And in Japan, the BoJ holds its two-day policy meeting. The 10-year JGB has surpassed the 0.5 per cent threshold for the third consecutive session.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https:/

The 10-year JGB breaks the BoJ’s ceiling for a second day while the yen surges. The central bank is now under pressure to begin tightening monetary policy. The IMF has a dire warning ahead of this year’s World Economic Forum meeting in Davos, predicting that economic fragmentation could cause global GDP to fall by up to 7 per cent. On Wall Street, U.S. banks post a mixed set of Q4 results amid increased provisioning and downturn concerns. Bank of America CEO Brian Moynihan says 2023 will see likely see a ‘mild recession’ in early to mid-2023. Credit Suisse is reportedly to slash 10 per cent of its investment banking staff as part of its next wave of restructuring.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

US consumer prices for December plunge at their steepest rate since April 2020. The headline CPI of 6.5 per cent is the smallest annual rise in more than a year. Despite Fed officials Patrick Harker and James Bullard insisting that rates will continue to rise, there are hopes the central bank could start cutting them later this year as inflation eases. In China, December exports hit their lowest level since February 2020, while Covid infections have continued to hamper domestic demand. Tesla is set to slash EV prices Stateside on its most popular models by 20 per cent in a bid to claw back market share following a rollercoaster 2022. And U.S. AG Merrick Garland appoints a special counsel to investigate classified documents found at President Biden’s home and private offices.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian markets are at a seven-month high on the back of the Nasdaq’s first four-day rally since last September. Investors are now awaiting the U.S. inflation data later today. In China, the CPI accelerates in line with falling Covid restrictions. However, factory prices are unexpectedly down, hampered by continuing snags in the global supply chain. Disney shares are up on the announcement that Mark Parker is to become the next chairman. Activist investor Nelson Peltz is denied a seat on the board at the entertainment giant. The world’s largest chip maker, TSMC, posts a near-80 per cent surge in Q4 profits of close to $10bn. And we hear from WEF managing director Saadia Zahidi ahead of next week’s Davos annual meeting. She tells CNBC that the cost-of-living crisis and climate change are the most grave crises facing the globe. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. Federal Reserve Chairman Jerome Powell says he recognises the pain of rising interest rates but insisted that the central bank needs to maintain its independence to successfully make difficult policy decisions. The Hang Seng leads Asian markets into the green as China continues to reopen follow. The World Bank cuts its global growth forecast almost by half warning that the economy is on pace for its weakest growth in 30 years. President David Malpass tells CNBC that despite the gloom, China’s reopening is a ‘key variable’. Airbus remains well ahead of Boeing as the world’s top plane maker with 2022 deliveries climbing by 8 per cent. And in France, a nationwide strike is announced for next week following the government’s move to extend the retirement age from 62 years to 64 in order to avoid a major structural deficit.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The New Year Wall Street rally stumbles with the Dow and S&P 500 closing in the red after the Fed Reserve’s Raphael Bostic and Mary Daly confirm that although hikes will slow the terminal rate will likely surpass the 5 per cent mark. Markets in China pull back somewhat following the reopening bounce. State officials say that several regions are now past the peak of Covid infections. Pfizer CEO Albert Bourla tells CNBC is could begin to manufacture its Paxlovid dose with a local Chinese partner within a matter of months. French President Emmanuel Macron’s government is set to roll out its pension reform plan, putting it on a collision course with unions and left-wing MPs. And in the UK, the government fails to agree a pay deal with various unions, potentially setting up more strike action this winter.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. indices rally to their best daily performance since November as a favourable December jobs reports raises hopes of a soft landing Stateside. CNBC hears exclusively from Atlanta Federal Reserve President Raphael Bostic who says that the pace of hikes could slow if there are signs of loosening in the labour market. Asian markets are in the green as China opens its borders and scraps Covid quarantine rules for the first time in three years. Alibaba shares are up as Ant Group founder Jack Ma gives up control of the company, easing tensions with the Chinese Communist Party. Ant now insists it will not relaunch an IPO. And in Brasilia, Brazil, hundreds of Jair Bolsonaro supporters storm the nation’s Congress, Supreme Court and other government buildings following last week’s inauguration of President Luiz Inacio Lula da Silva.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Stronger-than-expected employment data Stateside fuels concerns about further Fed tightening, pushing U.S. markets into the red. Kansas City Federal Reserve President Esther George tells CNBC that she believes rates will stay higher until at least 2024. In China, mortgage rules are loosened to help boost a flagging property sector and authorities are reportedly prepared to ease ‘three red line’ limits on developer borrowing. In tech news, Samsung Electronics expects to see Q4 profit slump by almost 70 per cent on the back of soft demand for smart phones and chips. The collapse of crypto exchange FTX prompts Silvergate Capital to cover $8bn in withdrawals. And Kyiv has rejected an Orthodox Christmas truce offered by Moscow while clinching U.S., German and French deals for armoured vehicles.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.