Squawk Box Europe Express

Deadlock in Brussels…EU leaders fail to agree on the bloc’s virus recovery fund following three days of negotiations. The so-called ‘Frugal Four’ nations are insisting that grants handed to the worst affected countries should be reduced. The lack of resolve tempers broader Asian gains but the Shanghai Composite manages to move 2 per cent higher, as the Chinese central bank keeps its lending rate steady. A sharp drop in Japanese exports also weighs on broader sentiment in Asia. The WHO reports a record single-day increase in global virus cases with Florida logging a fifth day of more than 10,000 infections.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Last Dance for growth… Netflix shares dive in extended trade despite the streaming giant adding more than 10m new subscribers in Q2. However, it warned growth would slow down to its weakest level in years as lockdown restrictions are eased. Moscow rejects U.S., UK and Canadian claims that a Russian hacker group has launched a comprehensive cyber-attack in an attempt to steal Covid-19 vaccine research. EU leaders attend their first physical summit in Brussels since the virus outbreak, hoping to approve the bloc’s €750bn recovery fund. And in auto news, Daimler is forced to suspend production of its saloon cars in the U.S. and Mexico as its speeds up cost-cutting and suffers a €1.7bn operating loss 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.

Bouncing back…Chinese GDP rises by 3.2 per cent from the first quarter, topping expectations. However, Asian equities remain in the red. Dozens of high-profile Twitter users’ accounts are hacked in a digital currency scam causing the platform’s shares to sink more than 3 per cent in extended trades. In energy news, Opec + agrees to unwind its record output cuts in supply. Resulting declines are tempered by the news that U.S. inventories are beginning to draw down. And shares in China’s SMIC chip maker soar by 240 per cent during its debut trade listing on the Shanghai STAR market.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Vaccine hopes. US. futures rally after a study shows Moderna’s COVID drug produces antibodies, with the biotech company saying all 45 participating people showed a “robust immune response” in the latest trial. The overnight market gains come after underperforming cyclicals and oil stocks lead U.S. averages higher, while big tech lags for a change. The biggest U.S. banks report earnings for the second quarter. Trading revenues surge, helping JP Morgan outperform, but ballooning loan-loss provisions weigh on results, dragging Wells Fargo to its first quarterly loss since the financial crisis. JPMorgan CEO Jamie Dimon warns the future path remains “murky.” Chinese markets trade in the red after President Trump signs an executive order suspending Hong Kong’s preferential status due to Beijing’s passing of a controversial security law.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wild swings on Wall Street… The Nasdaq closes sharply lower despite earlier positivity around approval of Pfizer and Biontech's 'fast-track' vaccine candidate. JPMorgan, Citi and Wells Fargo kick off earnings season amid concerns that banks will have to set aside more money to weather the virus crisis. In China, June imports and exports surprise to the upside with the economy reaping the benefits of both domestic and international lockdowns being lifted. However, Hong Kong rolls back on easing restrictions following a spike in cases across the territory. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Risk-on appetite continues despite another record increase in global Coronavirus infections. U.S. case numbers alone rise to 3.3mn. The White House announces it will levy 25 per cent tariffs on French cosmetics and accessories if it fails to back down on its digital tax plan, but gives Paris 180 days to change its stance. In energy news, oil prices are under pressure on news that Opec+ could reverse their agreed record output cuts following an improvement in demand. And U.S. automaker Tesla decides to slash the cost of its recently released Model Y by $3,000 – this, despite the SUV earning the company its first profit in 17 years.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall street divergence... The Nasdaq hits another record high as investors continue to bet on big tech stocks. The Dow and the S&P 500, however, slip into the red following a volatile session. The U.S. government sanctions top-ranking Chinese officials over allegations of human rights abuses against Uighur Muslims sending Chinese stocks lower, while Chinese banks brace for more restrictions from Washington following the introduction of Beijing’s controversial security law on Hong Kong. U.S. Treasury Secretary Steven Mnuchin tells CNBC that the White House and Congress are working to pass a new COVID-19 relief package by the end of this month, but warns it will not be as far reaching as earlier bills. And elections make headlines in Europe and Asia, with Singapore holding its general election amid a looming recession in the city- state while the Eurogroup chooses a new president to replace Mario Centeno.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/priva

Back into the green … the Nasdaq leads U.S. indices with a new record close as Apple hits an all-time high along with other big tech sector gains. In Europe, SAP enjoys a cloud boost as software licensing falls by 18 per cent and the German tech giant also confirms its full-year guidance. Airbus deliveries recover in May but H1 sales still hit a 16-year low - this amid a stand-off with unions over huge cost-cutting measures at the French aerospace company. And Brussels has reportedly struck a deal with Swiss and German drug makers Roche and Merck to supply EU member states with Covid-19 treatment medicines.  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 see recent gains pared back as the tech rally begins to lose steam but gold holds at its highest level for 8 years. Investors turn risk-off after confirmed Covid-19 cases Stateside top 3 million. The WHO is set to update its guidance after evidence emerges that the Coronavirus could be airborne after all. In corporate news, logistics giant Deutsche Post DHL beats forecasts to deliver a 16 per cent jump in Q2 operating profit. And German lender Deutsche Bank is issued a $150m fine by the New York state department for financial services for its ties to Jeffrey Epstein. CEO Christian Sewing tells CNBC it was “a critical mistake” to take on the late convicted paedophile’s account.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. Covid-19 cases spike by 250,000 in five days but markets are undeterred, closing firmly in the green. White House health advisor Dr Anthony Fauci says there are increased numbers of young people affected by the virus and that immunity may be finite. Chinese markets also see five days of big gains but a U.S. government official says President Trump is preparing several executive orders which could hit Chinese manufacturing, immigration and jobs to “reset the balance” with the country. In France, President Macron completes a government re-shuffle in a bid to shore up the post-pandemic recovery as well as his 2022 re-election prospects. And in tech news, Samsung shares are down despite a 23 per cent jump in operating profit in the second quarter. Chip demand had reportedly offset weak demand for smartphones and televisions during the virus outbreak.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese stocks rally to four-month highs with the CSI 300 marking its best day since February 2019 as investors bet on a re-opening boom following the COVID-19 pandemic. However, the WHO reports a record rise in infections, with the U.S. Sun Belt spiking and Spain re-imposing lockdowns in Catalonia and Galicia. In Germany, Commerzbank’s CEO and chairman both resign following a dispute with activist investors and unions. CNBC learns that an internal replacement is being considered. And in M&A news, Warren Buffett’s Berkshire Hathaway makes its first move since the onset of the pandemic – a $10bn bet on natural gas and storage assets at Dominion Energy.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Record highs…the U.S. sees a daily spike of more than 50,000 Coronavirus infections but President Trump says the June non-farm payroll numbers of 4.8 million new jobs proves the economy is “roaring back”. The Chinese services sector has expanded at its fastest rate in more than a decade as lockdown measures are eased across the country and consumer demand continues to inch upwards. In Germany, Deutsche Bank is coordinating with regulators to potentially bail out insolvent payment company Wirecard, with the aim of shoring up its banking unit. The search for a Covid-19 vaccine hits a snag on both sides of the Atlantic. French drug maker Sanofi says its arthritis medicine has failed against the virus while in the U.S., Moderna shares plunge after its trials are postponed.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Re-opening reversal. Some of the largest U.S. states are forced to review their lockdown easing measures, with Apple shutting more stores and McDonald’s postponing in-house dining, as cases spike by around 50,000 in one day. June private payrolls in the U.S. rise less than expected, with layoffs jumping more than 300 per cent for 2020, ahead of the non-farm payrolls data. However, both U.S. and Asian markets are up on hopes of a vaccine breakthrough following cautiously positive human trials by Pfizer and Biontech. In Europe, police in Germany and Austria raid Wirecard offices for alleged fraud with investigations potentially embroiling more senior executives.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The US records more than 47,000 Coronavirus cases, hitting a new daily record, as White House advisor Dr Anthony Fauci warns infections could reach more 'disturbing' levels. It’s a mixed start to the second half in Asian markets after closing out a bull-run in the previous quarter. Meanwhile, U.S. Treasury Secretary Steven Mnuchin promises to extend up to $140bn in crisis loans for the hardest-hit industries. In corporate news, FedEx delivers a bottom-line beat, sending shares sharply higher after-hours despite a 50 per cent drop in profit. The US shipping group says it will not provide an earnings forecast. And in aviation news, Airbus has announced that 15,000 jobs could be cut in the wake of the pandemic but unions are threatening a showdown with the French aerospace company.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Stocks look set to close the month firmly in the green, with the Dow Jones on pace to post its best quarter in more than two decades, while the Nasdaq sees its strongest quarter since 2001. Asian markets build on Wall Street’s gains on the back of encouraging PMI data out of China, which sees factory activity expand in June and improving trends in export orders. China passes the Hong Kong security bill in a move that has drawn international condemnation for imposing influence on the territory, but CEO Carrie Lam says "sanctioning doesn't scare us". Most of America's largest banks complete the stress tests with their dividend plans intact but Wells Fargo doesn't fare so well, saying it will have to cut its payouts.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A morbid milestone: global coronavirus cases pass the 10 million-mark with growing numbers across the U.S. Sun Belt states. The surge has prompted Florida to close beaches and California to shut down bars. The news sends Asian stocks lower despite some signs of recovery in China with May industrial profits rebounding, rising 6 per cent on the year. In advertising, a growing group of multinationals including Coca-Cola, Unilever and Starbucks are boycotting Facebook amid a backlash over hate speech control on the platform. And in energy news, fracking pioneer Chesapeake is forced to file for Chapter 11 bankruptcy as it collapses under spiralling debts and the oil price crash.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 has restricted banks from paying dividends, following the results of stress tests in the wake of the Coronavirus pandemic. Financials stocks fall in extended trading as a result. Disgraced German payments giant Wirecard has filed for insolvency prompting the country’s finance minister, Olaf Scholz, to call for an overhaul in financial regulation. In retail news, Nike sees shares fall after the sportswear giant missed sales forecasts with a 38 per cent fall in revenue. Online sales failed to offset the impact of store closures during the Covid-19 virus outbreak. U.S. secretary of state Mike Pompeo has agreed with EU foreign policy minister Josep Borrell to hold formal talks to tackle Beijing’s ‘predatory practices’.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A surge in cases sparks a sharp sell-off. U.S. markets tumble with the Dow Jones falling by more than 700 points while the Nasdaq posted its first decline in nine sessions. This, as U.S. daily Coronavirus numbers soared to their highest peak since April with California logging a record 7,000 infections while cases in Florida spike above 5,500. Recession fears have also weighed on sentiment. The IMF has lowered its global growth forecast, warning that GDP will contract by nearly 5 per cent in 2020. The pandemic has pushed U.S. crude stockpiles to record highs and placed pressure on demand expectations, sending oil prices sharply lower. And in Germany, drug behemoth Bayer has announced it will spend up to $11bn to settle litigation cases over the alleged harmful effects of its weedkiller, Roundup, while Lufthansa receives some good news, with its biggest investor suggesting he will approve the airline’s bailout.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice a

The spread of the outbreak quickens in the U.S., with Texas and Arizona seeing a spike in cases, in what top health official Anthony Fauci calls a “disturbing surge”. According to a document seen by the New York Times, the EU will reportedly prohibit American travellers from travelling to the bloc, listing the U.S. alongside Brazil and Russia for inadequate responses to the Coronavirus outbreak. In Munich, prosecutors have released Wirecard's former CEO on €5m bail. Markus Braun had been arrested over allegations he falsified accounts at the German payments company. And in tech news, Dell shares jump by more than 20 per cent on reports the computer company is exploring options for its $50bn stake in cloud services group VMWare, which include selling the holding or buying it outright.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Mixed messages: White House trade advisor Peter Navarro is forced to backtrack, saying the US-China trade deal is not over after his earlier comments suggesting the agreement was “off” hit markets. Apple plans to switch to its own chips for Macs, ending a 15-year relationship with Intel. The tech giant's CEO Tim Cook tells developers it's a huge leap in how the company powers its products. Meanwhile in Japan, Softbank sheds its shares in T-Mobile, selling 21 billion dollars worth of stock, as it divests two-thirds of its stake in a bid to raise funds for its buyback and debt draw-down plans. And finally in Europe, another deal attracts another investigation. The European Commission launches a 4-month anti-trust probe into LSE's 27 billion dollar bid for Refinitiv, amid competition concerns over the exchange mega-merger.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.