Squawk Box Europe Express

The U.S. markets rally continues with the Dow closing above its 200-day moving average for the first time in four months. Disney shares are up on the news that investor Daniel Loeb’s Third Point is to buy a new stake in the entertainment giant. The hedge fund manager has also written to CEO Bob Chapek urging him to spin off sports network ESPN. In mining news, BHP posts its best profit in 11 years and has suggested it may improve a bid for Oz Minerals. And in Germany has introduced a new gas price levy on households and businesses with Energy Minister Robert Habeck blaming Russia for allegedly weaponising resource security in the wake of the Ukraine conflict.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Weaker-than-expected retail and factory data prompts the Chinese central bank to slash the key lending rate as its zero-Covid strategy continues to impact the country’s economy. The S&P 500 posts its fourth consecutive winning week ahead of a slew of U.S. retail earnings. However, Richmond Federal Reserve President Thomas Barkin tells CNBC that demand is softening. In energy news, Saudi Aramco hits a record $48.4bn profit in the second quarter.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The recent U.S. equity rally stalls despite July wholesale prices showing a surprise decline. Treasury yields edge higher on anticipation the Federal Reserve can achieve a ‘Goldilocks’ soft landing. In pharma news, GSK, Sanofi and Haleon all see shares slump due to continuing litigation issues relating to a recalled heartburn drug. UK GDP figures are due out with soaring utility prices set to weigh heavily. And U.S. EV maker Rivian posts a Q2 loss of $1.7bn, sending shares tumbling in after-hours trade.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Nasdaq bounces back to bull market territory following yesterday’s better-than-expected inflation report. U.S. President Joe Biden says a lot more needs to be done to bring prices down. Treasury yields also contract on investor anticipation of less aggressive rate hikes but three Fed officials maintain there will further rises this year. Disney shares are in the green in extended trade on strong Disney + subscriber numbers. The entertainment giant has announced a price hike for the streaming service. And in Asia, Soft Bank has cut its Alibaba stake to 14.6 per cent to raise $34bn in a bid to bolster its balance sheet.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Expected U.S. inflation data causes both U.S. and Asian equities to fall, with consumer prices rising at their fastest rate in 2 years. Chip maker Micron posts a weaker-than-expected forecast with continuing supply chain headwinds impacting sentiment. Elon Musk sells almost $7bn of Tesla shares in anticipation of the possibility he may be forced to complete the Twitter purchase. In the UK, ministers warn of possible power blackouts this winter and prepare for worst-case scenarios should energy prices continue to soar.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The recent U.S. equity rally pauses with the Nasdaq and S&P 500 both closing lower ahead of tomorrow’s inflation report. Chip maker Nvidia issues a Q2 profit warning due to slumping gaming sales. In China, there are further Covid flare-ups with authorities locking down in parts of Tibet and Xingjiang, just a day after restrictions were imposed on the tourist island of Hainan. Norway has warned that it may ration electricity exports to Europe following low summer rainfall affecting its reservoirs.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. non-farm payrolls surprise to the upside which help to ease recession fears but also bump up Treasury yields as investors anticipate further Fed rate hikes. Chinese exports see faster-than-expected growth in July but imports suffer due to Beijing’s strict zero-Covid policies. The recent political upheaval in Italy has prompted ratings agency Moody’s to cut the country’s outlook to negative ahead of September’s general election. And in corporate news, Berkshire Hathaway suffers a $53bn loss on its investments in the second quarter.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Investors await key non-farm payrolls jobs report. Cleveland Federal Reserve President Loretta Mester has reiterated the central bank’s resolve to rein in inflation via rate hikes. On this side of the pond, the BoE hikes rates by 50 bps – the largest move it has made in 27 years. Governor Andrew Bailey says the UK is likely to fall into recession in the fourth quarter with inflation topping 13 per cent by October. Tesla shareholders approve a 3-for-1 share split. CEO Elon Musk suggests building more giga-factories and offering a share buyback. And Chinese e-commerce giant Alibaba posts a Q2 beat but revenue falls for the first time since its New York IPO, due to Beijing’s strict zero-Covid policies.  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 rally and yields retreat as better-than-expected services data prompt investors to ignore recession concerns. This, as Fed officials continue to push to curb inflation. We hear from St Louis Federal Reserve President James Bullard who favours front-loading and shrugs off talk of a U.S. recession. We are live at the Bank of England where the MPC considers raising rates for the sixth consecutive time in what could potentially be its largest hike in 27 years. In energy news, Opec + members disappoint the White House by hiking output by a modest 100,000 bpd.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall Street closes in the red for a second day running and Treasury yields rise following hawkish comments from San Francisco Fed President Mary Daly, who says that the battle to rein in U.S. inflation is far from over. Tensions are high in East Asia after U.S. House Speaker Nancy Pelosi touches down in Taipei to pledge close support for Taiwan, irking the CCP administration. Pelosi is the highest ranking U.S. official to visit the island in 25 years. We speak to Société Générale CEO, Frédéric Oudéa, who has seen the lender’s Q2 revenues surge by 13 per cent. Also, Chinese July PMI storms back expanding at its fastest pace for more than a year as Covid restrictions were finally lifted.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian markets slide on geo-political and recession concerns. WTI falls to below $93. The RBA hikes interest rates by 50bps but the Australian dollar falls on the news. The central bank says that inflation Down Under is yet to peak. Beijing warns that it will react if it believes its sovereignty is threatened ahead of U.S. House Speaker Nancy Pelosi’s proposed visit to Taiwan. Social media company Pinterest sees shares surge in extended trade after activist investor Elliot Management confirms a large stake in the company.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. stocks rebound from a tough first half in July, shrugging off inflationary concerns to notch their best monthly performance in more than two years. HSBC reports a 15% drop in first half profit as Europe's biggest bank wrestles with rising credit losses. Demand weakness and Covid curbs hit China's manufacturing sector as factory activity shrinks in July, and EU member states prepare to tighten their belts for a long cold winter, as a voluntary 15% cut in natural gas consumption comes into effect.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 in the green despite the U.S. economy posting a second consecutive negative quarter. The Biden administration, however, refuses to acknowledge the economy has tipped into recession. In tech news, Apple posts record Q3 revenues with iPhone demand remaining steady despite macro headwinds. Amazon’s AWS unit helps the e-commerce giant to a quarterly revenue beat. Meanwhile, rising interest rates boost Asia-focused UK lender Standard Chartered. Profits are up 19 per cent for the first half and the bank announces a $500m share buyback scheme.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The U.S. Federal Reserve raises rates by a further 75bps but does not elaborate on forward guidance. Chairman Jerome Powell says the path to that end may “narrow further” but that the U.S. is not in a recession. Equities Stateside rally as downturn fears recede slightly on his comments. Facebook parent Meta posts its first-ever quarterly decline with CEO Mark Zuckerberg citing softer digital ad spending. We also hear from Airbus CEO Guillaume Faury who says the plane maker is cutting its jet forecast due to labour shortages and supply chain bottlenecks.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

In tech news, Google parent company Alphabet sees revenue growth hit a two-year low following uncertainty about its ad spending business. Microsoft posts a miss on its top and bottom line but investors are buoyed by the company’s positive forecast. The IMF says the global economy is on the cusp of recession. We hear from the fund’s Head of Monetary and Capital Markets department, Tobias Adrian. Plus we have a whole slew of European corporate earnings, including Deutsche Bank, Holcim and Mercedes-Benz.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS posts a Q2 net profit of $2.1bn but challenges persist as it records $12bn in outflows from its asset management business. Russian gas firm Gazprom has cuts European gas supplies by half, citing maintenance issues. In retail news, Walmart issues its second profit warning in 10 weeks and moves to cut its FY guidance. We’re awaiting a slew of U.S. earnings ahead of an expected rate hike by the Federal Reserve later this week.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Social media stocks see a sell-off following Snap’s poor Q2 earnings. U.S. Treasury Secretary Janet Yellen, however, continues to downplay recession fears. In auto news, Volkswagen CEO Herbert Diess is pushed out of the position as a supervisory board seeks to replace him with Porsche CEO Oliver Blume. Uniper shares are down by almost a third following the German government’s agreement to buy a 30 per cent stake in the beleaguered utility. The WHO declares monkeypox as a global health emergency.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The ECB raises rates by 50bps – the central bank’s first hike in 11 years, which finally lifts the benchmark rate from negative territory. Italy is once again plunged into political turmoil and faces a snap election, possibly in late September, after the coalition government led by Prime Minister Mario Draghi collapses. President Sergio Mattarella is forced to accept Draghi’s resignation and dissolve parliament. In Germany, beleaguered utility Uniper is closing in on a bailout deal with a decision expected today. The country’s economy minister Robert Habeck accuses Russia of blackmailing Europe over gas. And Wall Street closes in the green but the momentum is short-lived as social media firm Snap misses expectations for the second quarter. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The ECB is set for a historic interest rate hike – its first in 11 years – and there is speculation it could be as much as 50bps. We are live in Rome where Prime Minister Mario Draghi is expected to resign following yesterday’s failed call for parliamentary unity. The crisis could prompt early elections this autumn. The Nord Stream 1 pipeline is to resume gas delivery following scheduled summer maintenance. However, the head of Germany’s energy regulator confirms that operations are only at 30 per cent of capacity. Tesla shares are up in extended trade as the electric car maker beats Q2 earnings expectations. CEO Elon Musk says he believes inflation is likely to top out later this year.    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall Street rallies, helping along markets into the green globally as earnings season begins. Netflix manages to stem subscriber losses, losing half the number initially feared. The streaming giant was saw strong numbers in Latin America and Asia. Germany awaits the scheduled re-start of the Nord Stream 1 gas pipeline following maintenance. Gas flows look to be on track following preliminary testing. Also in Germany, trouble utility firm Uniper is close to concluding bailout talks with Berlin which is reportedly seeking a 30 per cent stake in the company. And we are live in Rome ahead of Italian Prime Minister Mario Draghi’s debate with the Senate as the political crisis in the country reaches a crucial juncture which could potentially lead to early elections in September.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.