Squawk Box Europe Express

U.S. House Speaker Nancy Pelosi recalls lawmakers in a bid to resolve the mail-in voting dispute. CNBC hears exclusively from senior White House advisor Jared Kushner who defends President Trump’s handling of the Coronavirus pandemic. The U.S. leader piles more pressure onto Chinese firms by threatening to extend his ban on TikTok to include online retail giant Alibaba. Trade talks between Washington and Beijing have been delayed indefinitely. Warren Buffett’s Berkshire Hathaway dumps almost $13bn of shares with the investor selling down its bank stakes in Wells Fargo, JPMorgan and Goldman Sachs. France reports more than 3,000 Covid-19 cases in a single day, while Germany extends a travel warning for Spain’s Balearic islands as fears of a second wave of the virus sweep across western Europe.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese retail and manufacturing data for July fails to signal a significant rebound for the economy, raising concerns about China’s rate of recovery. Asian equities have reacted to the downside. In the U.S., President Trump threatens to veto the virus stimulus bill should it involve postal funding for mail-in voting. The Senate is now adjourned until next month potentially causing further delay. Israel and the United Arab Emirates agree a U.S.-brokered peace deal, creating diplomatic ties between the two nations and suspending Israel’s annexation of Palestinian territories in the West Bank. UAE Foreign Minister Anwar Gargash tells CNBC the agreement could diffuse some threats to peace. And France has vowed to retaliate after the U.K. hits travellers with a 14-day quarantine on their return from the country.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 remain defiant in the face of stalled virus stimulus talks with the S&P 500 closing just under record highs. President Trump calls Democratic lawmakers’ demands ‘ridiculous,’ as negotiations for a rescue package remain gridlocked. Joe Biden and his running mate Kamala Harris make their first joint appearance, and the Vice-Presidential candidate immediately launches an attack at President Trump’s handling of the Coronavirus pandemic. The U.K. is considering adding France to its quarantine list where case numbers have soared by more than 2,500 in a day. The British government is wary, however, of repeating the mayhem sparked by its sudden measures against Spain. And German travel giant Tui secures a €1.2bn state aid package from Berlin to see it through the winter.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A stalemate in talks between Democrat and GOP lawmakers over a multi-trillion dollar stimulus package helps end a week-long rally for the Dow Jones and S&P 500, outweighing optimism over a Covid-19 vaccine. This, as Russia announces it has granted approval for its Sputnik V drug. Presidential candidate Joe Biden chooses Kamala Harris as his running mate – the first black woman to be chosen on a major party ticket. President Trump is swift to attack Harris’s record as a former rival to Biden in the Democrat primaries. And in a bid to make stocks more accessible, electric car maker Tesla offers a 5-4-1 share split, sending valuations soaring in after-hours trading.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian markets rally, following U.S. stocks into the green with the Hang Seng and Nikkei leading the pack. Investors opt out of the tech sector and move towards cyclical stocks. U.S. lawmakers remain divided over the virus relief package, but Treasury Secretary Steven Mnuchin tells CNBC that President Trump’s strategy will yield results in reviving the economy. In Lebanon, the government resigns following last week’s massive port explosion and ongoing protests. Outgoing Prime Minister Hassan Diab blames endemic corruption for the tragedy. And German drug developer Curevac hopes to raise $245m to fund a potential Covid-19 vaccine by listing on the Nasdaq.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

President Trump signs executive orders to extend unemployment assistance after virus stimulus plans collapse between Republican and Democrat lawmakers. Twitter has reportedly made a move for Chinese video app TikTok, which is seeking to sue the Trump administration over the U.S. ban. In Lebanon, Prime Minister Hassan Diab says he will request an early election in a bid to quell ongoing protests following last week’s port explosion in Beirut. And in energy news, Saudi Aramco sees Q2 profits nosedive by 73 per cent, but CEO Amin Nasser says the worst is over, sending shares higher in early trade today.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian indices slump into the red after President Trump signs an executive order banning U.S. companies from working with Chinese apps TikTok and WeChat. Trump has branded both mobile applications as a “threat” to U.S. national security and economy. Mixed Chinese trade data for July sees exports rising by 7 per cent, but imports fall by 1.4 per cent due to depressed demand. Uber’s Q2 revenues fall by almost a third as the ride-sharing app’s pivot to delivery services fails to offset a dearth in passengers during global lockdowns. And we hear from BoE governor Andrew Bailey who tells CNBC that negative rates are “in the toolbox” but that the central bank had no immediate plans of implementing them. He also denied accusations the BOE was too optimistic about the speed of the recovery following the Covid-19 pandemic.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 close higher, shrugging off dismal ADP jobs numbers as Democrats continue their opposition to proposals in a fresh virus stimulus package. U.S. airlines shares respond to the upside following GOP Senators’ backing of a $25bn aid package for the industry. Bosses of the largest carriers warn that demand will take years to rebound. Siemens makes changes to its managing board as it beats Q3 forecasts, but the German industrial giant expects the pandemic to weigh on profits in the fourth quarter. And in London, the BoE prepares to issue its latest decision. There is speculation that policy makers will dash hopes of a V-shaped recovery for the UK.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A massive chemical explosion in Beirut leaves more than a hundred dead and thousands wounded. President Trump suggests the blast may have been intentional. Chinese service sector growth retreats from a decade-high, as new localised lockdowns blunt the country’s post-pandemic recovery. In media news, shares in Disney rally despite a poor Q2, as investors pin hopes on a new streaming strategy potentially offsetting theme park losses of 85 per cent on the year. And Virgin Atlantic files for bankruptcy protection in the U.S. as it scrambles to secure a rescue plan to ward off creditors.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A 3-way deal? President Trump says the U.S. Treasury should receive a significant cut of Microsoft’s bid for Chinese social media app TikTok, as he says the companies have until 15 September to reach an agreement. U.S. major averages start August in the green with the Nasdaq hitting another record high. Google parent Alphabet issues a record $10bn in corporate debt at a rock-bottom coupon price. And in Europe, German lender Commerzbank goes against the advice of its second-largest shareholder, private equity group Cerberus to appoint Hans-Jorg Vetter as chairman.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Provisions eat into profit at HSBC after first half earnings miss forecasts, falling 65 percent as the bank sets aside more capital and warns of ongoing risks for the year ahead. French bank SocGen reports a €1.2 billion loss in the second quarter as the lender takes an impairment charge on its global markets business. President Trump reportedly gives China’s ByteDance 45 days to sell TikTok to Microsoft after the White House threatens the ban the short video app over security concerns. And: an historic moment for space travel as NASA astronauts successfully return from their mission to take the Crew Dragon to the International Space Station in the first mission from US soil in almost a decade.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Technology giants lead the way on Wall Street with Apple, Alphabet, Facebook and Amazon adding $200bn to their combined value in after-hours trading. Apple posts the biggest quarterly revenue jump in its history. Facebook records its slowest-ever sales growth but still beats forecasts through double-digit advertising revenues, shrugging off a recent corporate boycott. Lockdowns around the world have helped Amazon mark its best quarterly profit as well as create 175,000 new jobs. And, despite suffering its first sales slump in 16 years and weak cloud performance, Alphabet is buoyed by a robust ad recovery for Google.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Credit Suisse leads a slew of European earnings, reporting a 24 per cent increase in second quarter profit as CEO Thomas Gottstein announces a merger of the global markets and investment banking divisions. Standard Chartered reports a 25 per cent drop in first-half profits and warns it is bracing for a fresh wave of Covid-19 challenges. Revenues at Airbus fall 55 per cent as losses total €1.6bn for the French aerospace firm so far this year. And in energy news, Total unveils an $8bn writedown after taking a hit on its Canadian assets. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Deutsche Bank posts a second quarter loss of €77m despite investment bank revenues rising 46 per cent, as cost-cutting measures weighed on the bottom line. Santander reports a record second-quarter loss of €11bn amid a slew of write-downs. French luxury group Kering sees sales fall by 44 per cent in Q2 and abandons its guidance, saying it does not predict a rebound in the second-half. However, there is more optimistic news for Starbucks which sees lower-than-expected declines in sales worldwide, boosting shares in after-hours trading. The coffee giant expects to be profitable again this coming quarter.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Republican lawmakers announce they have agreed on a $1tn virus stimulus bill with Senate majority leader Mitch McConnell saying the U.S. “has one foot in the pandemic, one foot in the recovery”. Market uncertainty keeps gold at record highs but just shy of the $2,000/oz. price. Spanish Prime Minister Pedro Sanchez slams the UK government’s blanket quarantine decision as ‘not justified’. London has extended the measures to include the Canary Islands and Balearics, prompting sweeping flight and package cancellations from travel operators. And in retail news, there are disappointing H2 earnings from Moncler as well as luxury giant LVMH which posted a near-70 per cent slump in operating profit.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Second wave caution… The UK sparks travel chaos with an overnight decision to reinstate quarantine measures against travellers from Spain. Madrid, airlines and travel operators hit out at the move. Gold hits a record high on the back of heightened U.S.-China tensions as authorities take over Washington’s consulate in the south-western city of Chengdu. In the U.S., Republican lawmakers reportedly agree on the next Coronavirus relief bill which would commit to direct cash payments as well as 70 per cent furlough measures. And in corporate news, German software giant SAP is planning to float consumer monitor firm Qualtrics, just two years after purchasing it for $8bn.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Intel shares nosedive in after-hours trading as the U.S. chip maker issues disappointing Q3 guidance and postpones the launch of its next generation product. The S&P 500 breaks a four-day winning streak as big tech stocks sell off. Apple shares weigh particularly heavily as the Iphone maker faces an investigation into potential breaches of consumer protection laws. In Washington, the virus stimulus bill has been delayed until next week. Wrangling over unemployment insurance and direct cash payments have forced the stalemate between the Senate and the White House. Chinese assets are in the red as Beijing retaliates against the U.S. closure of its Houston mission by shutting down its counterpart in Chengdu. U.S. Secretary of State Mike Pompeo has slammed the Chinese Communist Party over alleged spying. He said the West’s tolerance of Chinese interference had created ‘a Frankenstein’.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info

Big tech dominates overnight trade…Microsoft shares tumble in after-hours trading as investors ignore the forecast-beating Q2 numbers and focus on the slowing growth of the software giant’s Azure unit, as the cloud business sees revenue growth dip below 50 per cent. Tesla posts a profit for the fourth consecutive quarter, countering factory shutdowns during lockdown with strong orders and cost cuts. The full year of profitability means the electric carmaker is now eligible to be listed on the S&P 500. Earnings are also front and centre in Europe. Swiss pharma group Roche sees profits and sales fall in the first half, but says a turnaround has already begun. German car giant Daimler’s sales plunge in the second quarter, amid a severe downturn in the autos market due to the pandemic. A potential Covid-19 vaccine deal and progress in virus stimulus bill talks in Congress push the Dow Jones above the 27,000-point level for the first time since June. However, Asian markets are down on news that

A change in tone…President Trump warns that the Coronavirus outbreak will get worse before getting better as the U.S. logs more than 1,000 daily deaths for the first time in more than a month. U.S. stocks dip on the warning, taking down the Nasdaq as well after it hit another record high while precious metals rally with gold reaching a peak not seen since 2011. On a visit to the UK, U.S. Secretary of State Mike Pompeo urges the world to stand up to China over its response to the Covid-19 pandemic as the DoJ says that Chinese hackers have attempted to steal vaccine research. And Snap shares tumble in after-hours trading as user growth slows and losses deepen.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Breakthrough in Brussels …EU leaders finally agree on a €750bn record virus recovery plan and a budget for the bloc after marathon five-day negotiations. The so-called ‘Frugal Four’ were swayed by increased rebates and a lowered €390bn in grants for the hardest-hit countries. Swiss lender UBS posts a higher-than-expected Q2 net profit, despite taking a hit in corporate and consumer lending. The bank expects credit loss expenses to be lower in the third quarter as market activity picks up. US indices are buoyed by a return from Big Tech stocks which add $290bn in market value. Amazon has its best day in two years, pushing the Nasdaq up by 2 per cent. And IBM shares also rally after the computer giant beats estimates for the second quarter on strong cloud performance.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.