Squawk Box Europe Express

The dollar dips with futures relatively flat as a surprise poll puts Kamala Harris ahead in the Republican-leading state of Iowa. National polling still places both candidates neck-and-neck. Berkshire Hathaway continues to dial down its stakes in Apple and BofA, boosting its cash pile to $325bn. The German ruling coalition is in disarray after finance minister Christian Lindner’s economic manifesto causes major rifts with coalition partners, prompting Chancellor Olaf Scholz to summon talks late last night. Oil surges on the news that Opec+ nations agree to delay output hikes by a month. We hear from TotalEnergies CEO Patrick Pouyanné who says industry margins are under pressure.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Apple shares dip following cautious guidance ahead of Christmas. The company also reveals little about demand for its new iPhone 16. Amazon posts a beat on quarterly earnings causing shares to pop in extended trade. The e-commerce giant’s CEO Andy Jassy pledges to significantly ramp up spending on the company’s A.I. technologies. On Wall Street the S&P 500 and the Nasdaq suffer their worst day in more than a month following disappointing Big Tech results. And in the UK, the gilt sell-off increases and sterling endures a volatile session as investors fear Chancellor Rachel Reeves’ budget could force inflation back up while piling up debt.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Microsoft enjoys an A.I. boom but there are concerns over capex and a slowing cloud division which pulls the share price lower in extended trade. Meta posts a top and bottom line beat but shares also fall in after-hours trade as investors remain anxious over greater A.I. infrastructure expenditure at the social media giant. BNP Paribas notches a near-six per cent quarterly rise in net income and confirms its forecast. CFO Lars Machenil tells CNBC he remains bullish about the trend. There’s a surprise expansion in Chinese manufacturing activity in October as recent stimulus measures help to end five consecutive months of contraction. And in the UK, investors digest the first Labour budget in 15 years following one of the largest increases in taxation, spending and borrowing on record.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS posts $1.4bn in Q3 net profit as the lender accelerated the integration of former rival Credit Suisse. Standard Chartered almost doubles its quarterly pre-tax profit which prompts the London-based bank to hike guidance and pledges to lift its dividend payout. Meanwhile in the U.S., Alphabet’s cloud arm delivers stellar results which help push the company’s annual revenues up by 15 per cent in the third quarter, this despite a slowdown in its search and YouTube services. In the UK, gilt yields hit a post-election high ahead of Labour’s much anticipated first budget in 15 years.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Novartis posts Q3 earnings with 10 per cent sales growth and 20 per cent core income growth. The drug maker has also hiked its FY guidance. HSBC sees Q3 profits jump by 10 per cent. The lender has also launched a $3bn buyback scheme on the back of slower-than-expected rate cuts. Wall Street begins the week in the green ahead of key inflation data and earnings from the tech sector. In autos news, Volkswagen is warning of unprecedented plant closures and mass lay-offs as the German giant struggles against Chinese rivals and poor demand for EVs.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The ruling LDP in Japan loses its parliamentary majority in its worst defeat more than a decade. The yen slumps to a three-month low as a result. We hear from German finance minister Christian Lindner at the IMF annual meeting in Washington who says Europe must be prepared for a second Trump administration. Moody’s cuts its forecast for France to negative for worse-than-expected fiscal deterioration. The credit ratings agency also cast doubt over the current government’s ability to tackle wider deficits. And in the U.S., campaigning enters its final full week with both candidates targeting purple swing states. In energy news, Brent and WTI are both sharply down after IDF airstrikes avoided key Iranian oil installations. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla shares rocket by 21.9 percent – the company’s largest one-day gain in more than a decade – as U.S. markets hope to avoid their first negative week in six. The IMF warns that the growth gap between the EU and U.S. will only widen further. We hear from ECB board member and governor of the National Bank of Belgium, Pierre Wunsch, who says he would consider a 50 basis point rate cut should data move in the wrong direction. Japanese voters head to the polls this weekend with the ruling LDP facing the prospect of a heavy defeat and the first possible loss of parliamentary majority since 2012. And in the U.S. a court blocks a merger between Coach owner Tapestry and the owner of Michael Kors, Capri Holdings.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla share surge in extended trade after the EV maker posted a better-than-expected earnings beat in Q3. CEO Elon Musk says the company’s sales targets of 20-30 per cent are achievable next year. The U.S. Treasury yield hits a three-month high and the dollar rallies as jitters over fiscal spending and the U.S. election surface. IMF First Deputy MD Gita Gopinath tells CNBC the macro environment is beginning to stabilise. South Korean semi-conductor supplier SK Hynix notches a record quarterly profit and shrugs off fears of an A.I. supply glut. French luxury giant Kering slashes its FY operating profit outlook by half after sales at Gucci continue to slump. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The IMF hikes its U.S. forecast for 2024 but Germany weighs on the European outlook. The IMF’s Director of the Monetary and Capital Markets department, Tobias Adrian tells CNBC there are reasons for optimism. The S&P 500 suffers its first back-to-back session loss since September as investor attention turns to the dollar. Markets are now increasingly pricing in the outcome of a Trump victory in the U.S. election next month. Speaking to CNBC, IIF CEO Tim Adams believes the fight against inflation could be compromised as a result. French cosmetics giant L’Oréal misses Q3 sales targets as consumer demand in China wanes but the company pins its hopes on the market and on further stimulus from Beijing. Asian markets warmly welcome new listings Tokyo Metro – Japan’s largest in 6 years, while China Resources Beverages also gains on its debut in Hong Kong. And in banking news, Deutsche Bank notches a €2.3bn Q3 profit beat, thanks partly to the release of Postbank-related litigation provisions.    See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A late rally from Big Tech stocks pushes the Nasdaq to the brink of a fresh record high as earnings season begins in earnest. German computing giant SAP hikes its FY guidance following a top and bottom-line Q3 beat on the back of strong cloud revenues. Maersk raises its FY outlook for the fourth time this year. In autos news, monthly new car sales decline as demand for plug-in hybrid wanes, dropping more than 20 per cent across all major markets. Hyundai Motor India stock plunges 5 per cent as the retail sector response to the Bombay Sensex listing – the country’s largest ever IPO - is muted.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The PBOC cuts its benchmark lending rate to provide more support for the economy. The Shenzhen Composite moves higher as a result. In the U.S., Wall Street posts its longest streak of weekly gains so far this year on the back of lower rates and earnings optimism. Fitch confirms Italy’s credit rating and boosts its outlook to ‘positive’ in a sign the euro zone’s third largest economy is on the right track. And overnight in Lebanon, Israel targets Hezbollah-linked banks.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian markets remain sanguine on China’s slowest GDP growth in more than a year as the PBOC’s raft of stimulus measures kick in. Bridgewater Associates founder Ray Dalio tells our colleagues in Singapore that the central bank’s support needs to be more focused. We hear from IMF managing director Kristalina Georgieva who says that while governments need to head off high levels of debt, she is optimistic about reining in inflation. The ECB delivers a back-to-back rate cut for the first time in 13 years. The move is due to weak economic data and slow progress in tackling inflation within the euro zone with ECB president Christine Lagarde indicating more cuts will be needed. Netflix posts its most successful quarter ever, beating expectations and adding 5 million new customers. In Gaza, Israeli troops kill Hamas leader and the October 7th attacks mastermind Yahya Sinwar. Prime Minister Benjamin Netanyahu has hailed his death as ‘the beginning of the end’ for the conflict.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese developer stocks sink despite the housing ministry briefing outlining further measures to help prop up the troubled property sector. We are live in Brdo, Slovenia where the ECB’s governing council is holding its annual external meeting ahead of its widely expected second consecutive rate cut later today. Stateside the Dow hits a fresh record high thanks to Morgan Stanley reporting quarterly beats on both the top and bottom lines. CEO Ted Pick tells our U.S. colleagues that he no longer expects a slew of companies to come to market. Swiss robotics company ABB hikes its margin guidance despite failing to hit Q3 profit and revenue forecastsSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Dutch chip maker ASML suffers its worst sell-off since 1998 after it slashed its sales outlook in an earnings release it published accidentally. Chip stocks see heavy losses globally as a result. French luxury giant LVMH posts its first quarterly loss since the Covid pandemic, missing expectations with the group warning Chinese consumer confidence has hit an all-time low. Adidas increases its FY outlook for the third time this year as bumper sales of its retro sneaker models helped it to a Q3 earnings beat. In China, equities endure choppy trade as the housing ministry announces it will give another public update briefing on the country’s beleaguered property sector tomorrow.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Crude prices tumble following reports that Israel will back off targeting Iranian oil or nuclear infrastructure. Opec has also slashed its demand forecast. On Wall Street, the S&P 500 records its 46th record close of 2024, helped along by tech giant Nvidia hitting a new all-time high which places it on the verge of overtaking Apple as the world’s most valuable company. We are live at the Paris Motor Show where European car makers pledge to take on Chinese competition. Xpeng CEO Brian Gu tells CNBC the company is looking beyond European Union EV import tariffs. In London, UK Prime Minister Keir Starmer vows to cut red tape to ramp up investment in the country. BNY CEO Robin Vince tells this channel a steady, pro-growth and consistent approach is key for investors.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese consumer inflation disappoints for September while deflation deepens in the manufacturing sector. Chinese markets see a volatile session following Saturday’s finance ministry press conference. Finance minister Lan Fo’an says there is ample room for more stimulus measures but stopped short of giving specific details. In the U.S., JPMorgan beats quarterly earnings expectations while Wells Fargo also posts a solid beat on the bottom line. The UK attempts to diffuse a row over investment in the country with DP World on the eve of a international summit on London as the government announces a reported £50bn round of new investments. We are also live at the Paris Motor Show where the beleaguered European sector is reeling from profit warnings, falling demand and pressure from Chinese automakers. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. inflation data comes in higher than expected with the 10-year Treasury yield held above 4 per cent. Atlanta Fed President Raphael Bostic has proposed a pause in the cutting cycle at next month’s Fed meeting. Tesla CEO Elon Musk unveils the company’s long-awaited ‘Cybercab’ with a prospective production date in 2026 but early market indications are potentially sceptical. In China, there is further trouble for the markets with the Shenzhen Composite tumbling by more than 15 per cent for the week ahead of tomorrow’s finance ministry press conference. And the new French government launches its 2025 budget, which includes €60bn of tax hikes and spending cuts, in a bid to slash the country’s ballooning deficit.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

FOMC minutes show greater splits over last month’s jumbo 50bps rate cut than initially thought but sanguine U.S. equities shrug off news about September’s Fed decision. In Asia, Chinese stocks extend gains amid heavy trading volumes as the PBOC’s 500bn yuan stimulus measures come into effect. Germany downgrades its growth forecasts, now guiding for a second year of recession. Economy Minister Robert Habeck claims the government is seeing progress in tackling both the country’s structural problems and global challenges. Airbus deliveries are down 9 per cent in September but the plane maker believes it will achieve FY targets in the final quarter. And in the U.S., up to 2 million people are without power after Hurricane Milton smashes into Florida’s central Gulf Coast and barrels inland, now downgraded to a Cat 2 storm.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese equities come crashing back to Earth, snapping a 10-day winning streak following the PBOC’s recent stimulus measures as economic realities sober up markets. Stateside, the DoJ is considering a break-up of Google following August’s landmark monopoly ruling. French Prime Minister Michel Barnier’s fledgling government survives a parliamentary vote of no-confidence as he prepares to launch his budget plans to cabinet tomorrow. And in Florida, Hurricane Milton has once again been upgraded to a Category 5 storm with authorities urging Gulf Coast residents to leave the region. President Biden has warned evacuation is now a matter of life and death.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Chinese blue-chip CSI 300 Index pares gains of more than 10 per cent following the week-long National Day Holiday. An official CCP economic conference subsequently fails to wow investors. The World Bank issues a 4.3 per cent growth forecast for the world’s second-largest economy as turmoil in the Chinese property market persists. Tech giant Samsung issues a rare apology for offering Q3 profit guidance which was well below analyst expectations. The chip maker said it had struggled against higher supply from rival Chinese companies. We are live at Hon Hai Tech Day in Taipei, Taiwan where Foxconn chairman Young Liu tells CNBC that the A.I. investment boom is still very much in the process of evolving.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.