Squawk Box Europe Express

A record rise in global coronavirus cases keeps markets on edge, with the US logging its second-highest number ever, while Brazil's infections top 50,000 and Germany sees its rate spike because of an outbreak at a slaughterhouse. In the U.S., President Trump makes a lackluster return to the campaign stage, as his rally in Tulsa draws a smaller than expected crowd. The U.S. leader used the rally to attack Joe Biden and protesters, while spending little time addressing COVID. In Germany, Wirecard withdraws its first quarter and full year results, as the German payments company says the 1.9 billion euros missing from its accounts may never have existed. Meanwhile, sources tell CNBC Lufthansa bosses will meet with the ministry of finance and billionaire investor Heinz Herman Thiele today to try to reach a bailout resolution ahead of a shareholder meeting 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.

U.S equities head in different directions. The Dow closes slightly lower, as states like Arizona log record virus cases, diverging from the Nasdaq, which posts its first 5-day winning streak in a month. McDonalds plans to beef up its workforce this summer, with plans to hire 260-thousand people, as the fast food giant begins returning to normal operations in the US. Staying in America, the Supreme Court deals a blow to President Trump, declaring that his plan to end an Obama-era youth immigration protection plan is unlawful. Meanwhile in Germany, shares in Wirecard close down over 60 percent after the payments group admits 1 point 9 billion euros has gone missing, saying it believes a third party has tried to deceive its auditor.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Trade tensions return after the US government pulls out of talks with European countries over their digital tax plans, dashing hopes of a global deal and reviving the prospect of tariffs. Brussels launches an anti-trust probe into Fiat Chrysler and PSA's 50 billion dollar mega merger, citing concerns over their dominant market share in the small vans market. In Asia, markets trade lower, but JD.com rallies on the e-commerce giant's 3 point 8 billion dollar Hong Kong debut. And in the U.K., the Bank of England is expected to expand its bond buying plan but steer clear of negative rates despite Governor Andrew Bailey saying they are QUOTE 'under active review'.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A retail rebound …. U.S. retail sales jump a record 17.7 per cent in May, beating expectations and helping the Dow close more than 500 points higher. But Fed chair Jerome Powell warns of significant uncertainty surrounding the timing and the strength of the US recovery, as he testifies before the US Senate, but plays down the central bank's latest push into the corporate bond market. Meanwhile, President Trump signs an executive order that reforms police practices as he also calls for calm from protesters, saying 'America wants law and order. The U.K. claims a drug breakthrough, fast-tracking approval for the use of a common steroid that reduces the risk of death for critical COVID patients by a third.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

A big comeback for stocks, as US futures surge after Wall Street swings back from a negative session and the Nikkei gains more than 4 percent. The Fed says it will begin buying individual corporate bonds on top of ETF purchases, in what is seen as another shift to more active market intervention. Meanwhile the WHO calls for an investigation into new coronavirus clusters, as the outbreak in Beijing grows and hospitalizations in Texas hit an all-time high. In the UK, Prime Minister Boris Johnson says a Brexit deal by the end of July is possible, after talks with EU leaders end with a positive tone despite key sticking points.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Asian stock markets and US Futures begin the week in the red, after the Dow posts its worst weekly performance since the middle of March. This as Chinese industrial output in May misses expectations as Beijing is forced to lock down more than 10 neighbourhoods following a Coronavirus outbreak at a local market, raising fears of a second wave in the country. In the U.S., infections also spike in the southern states of Florida, Alabama and South Carolina where record number of new cases a reported for a third day in a row. In Europe months of travel restrictions are eased and borders are reopened as EasyJet prepares to launch its first flight since March from Gatwick.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The worst moves since March... The Dow Jones falls by almost 7 per cent, breaking a three-week winning streak. The broad market sell-off means all the major U.S. averages suffer their worst performance in three months. The losses are led by the energy and technology sectors, with the biggest five tech names losing a collective $270bn in market value in just one day. The huge reversals have been prompted by a resurgence in U.S. Covid-19 cases amid a second spike. The IMF has estimated that global governments have already spent $10tn in fighting the pandemic. But, U.S. Treasury Secretary Steven Mnuchin tells this channel that the damage from a second economic shutdown is unthinkable. And following the death of George Floyd, President Trump is set to sign an executive order to invest more in law enforcement and improve policing standards, while Apple pledges $100mn to improve racial justice.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-n

Lower for longer…the U.S. Federal Reserve promises to keep rates near zero until at least 2022 to support the economic recovery in the wake of the Coronavirus pandemic, with chair Jerome Powell emphasising that policymakers are “not even thinking about thinking about raising rates.” The central bank has also issued its first economic forecasts since the outbreak, saying the U.S. economy could contract by 6.5 per cent this year. The Dow and S&P both dip after an unsteady Wednesday session with Asian indices and U.S. futures also trading firmly in the red. The Nasdaq diverges again, closing above the milestone 10,000-point mark for the first ever. In M&A news, Just Eat takeaway gobbles up its U.S. rival GrubHub in a $7.3bn all-stock deal. In Hong Kong, internet giant Netease sees its shares rally during its first trading session as Chinese companies face greater scrutiny over their U.S. listings. And in the wake of racial tensions in America, Amazon has frozen police use of its facial recognition techno

Big tech breaks out… FAANG stocks help the Nasdaq briefly pass through the 10,000-point mark for the first time, while the Dow suffers its worst day in three weeks, snapping a six-day winning streak. Investors focus on the Fed, as the central bank prepares to release its first economic forecasts since before the pandemic. Morgan Stanley CEO James Gorman tells CNBC he believes that the worst of the Coronavirus fallout for the U.S. economy has now passed but warned the government not to be over-confident following the recent market rally. Chinese producer prices fell at their steepest rate in four years in May, which has raised the prospect of further easing by the PBOC. And in Hong Kong, HSBC comes under fire from U.S. Secretary of State Mike Pompeo who has accused the lender of ‘kowtowing’ to Beijing and investor Aviva says it’s also concerned about its support for a controversial new security law.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not

U.S. markets surge with the Nasdaq closing at a record high and the S&P 500 turns positive for 2020 as investors wait on this month’s Federal Reserve rate decision. Veteran hedge fund manager Stanley Druckenmiller tells CNBC that the current market rally and Fed moves caught him by surprise. President Trump has announced that he will not defund police departments after Democrats called for law enforcement reform in the wake of the alleged killing of George Floyd. In energy news, Saudi Arabia has said that it will no longer cut additional oil supplies following the latest OPEC+ one-month extension. And BP is set to slash 10,000 jobs despite rising oil demand.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Something to work on… Asian markets rise on an unexpected jump in U.S. employment but questions linger over whether misclassifications kept the unemployment rate lower in May. In energy news, oil rallies following an OPEC+ agreement to extend output cuts. Chinese exports for May fall unexpectedly, while imports plunge in their sharpest decline in four years. Protests continue across the U.S., with Washington D.C. seeing the largest Black Lives Matter demonstration to date. And in the UK, British Airways, EasyJet and Ryanair make a legal challenge against the government’s 14-day Coronavirus quarantine policy.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Big Bazooka…Italian bond yields fall after ECB President Christine Lagarde announces an almost €600bn extension to its pandemic support package in order to help offset the sharp growth contraction throughout the eurozone. In Asia, markets edge higher as U.S. averages break a four-day winning streak. Unemployment in the States, however, is set to near 20 per cent in today’s jobs report. We hear exclusively from Nissan CEO Makoto Uchida, who says that the shock of the Coronavirus outbreak will serve to accelerate tech changes within the autos sector. And we are live at Lingfield Race Course in Surrey as horse racing – worth £4bn yearly to the British economy – becomes the first major sport to restart following the UK lockdown.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Markets undeterred… the S&P 500 posts its longest winning streak since February. This, despite the ongoing unrest across the U.S., as well as divisions over the response within the White House. The ECB is reportedly ready to expand its asset purchase programme as the central bank looks set to release gloomy growth projections for the eurozone. Meanwhile, Berlin announces a €130bn stimulus package to help kickstart consumer demand and bolster Germany’s economy. In energy news, Saudi Arabia and Russia look set to agree on extending oil output cuts for a further month but compliance issues mean OPEC is yet to confirm today’s producer meeting. Tensions simmer between the U.S. and China after the Trump administration blocks Chinese carriers to the country in a bid to pressure Beijing into lifting its own ban on U.S. airlines. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. tensions continue with the Pentagon moving 1,600 troops to the Washington D.C. area in anticipation of more violence following the police killing of George Floyd. The U.S. government launches a probe into nine countries which are threatening to impose digital taxes on tech firms. Trade Representative Robert Lighthizer has warned that the U.S. will “take appropriate action to defend U.S. business”. In luxury news, LVMH is reportedly reconsidering its $16bn takeover of U.S. jeweler Tiffany, prompting shares to sink almost 10 per cent. In China, service sector growth has roared back, with the PMI hitting its highest level for a decade. However, unemployment also continues to rise. And in the UK, sterling rises on reports that London will compromise with Brussels on trade rules ahead of upcoming Brexit talks but concerns remain over financial access to continental markets.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info

President Trump vows to send in the army should state governors fail to quell the violent protests raging across U.S. cities following the police killing of George Floyd. Some Facebook employees stage a virtual walkout, demonstrating against the social media platform’s failure to act on President Trump’s “when the looting starts, the shooting starts” post. In Hong Kong, CEO Carrie Lam hits out at Washington, accusing it of double standards over its reaction to its own protests, while S&P hints at downgrading the territory. And in the UK, Prime Minister Boris Johnson is reportedly set to meet with European Commission President Ursula von der Leyen ahead of the final round of Brexit talks.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Anger in America… protests and looting rage on across the U.S. following the police killing of a black man in Minneapolis. Curfews have been imposed and the National Guard is called in to quell the violence. Retailers Walmart, Target and Apple are forced to shut due to the unrest and Amazon restricts deliveries. In Asia, the Hang Seng shrugs off President Trump’s announcement that Hong Kong has lost its special status, amid relief he stopped short of re-igniting the trade tensions with China. In aviation news, Lufthansa agrees to revise conditions for its €9bn bailout, accepting the loss of certain runway slots at key German airports.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Talking tough… Asian equities fall, with the Nikkei retreating from three-month highs as President Trump says he is “not happy” with Beijing following its approval of a controversial Hong Kong security bill. The U.S. President also promises to weaken a law protecting social media firms, saying they have breached their “unchecked powers”, while Facebook founder Mark Zuckerberg tells this channel that social media platforms have no right to fact-check users’ posts. France and the UK have unveiled further measures to ease the pandemic lockdown. Paris relaxes travel restrictions and will allow restaurants to reopen next week, while Prime Minister Boris Johnson permits larger social groups to gather. In autos news, Renault announces 15,000 job cuts aimed at stemming losses from plunging sales. And European market sentiment is buoyed by the news that coffee company JDE Peet’s aims to raise over €2bn in Europe’s biggest IPO so far this year.  See Privacy Policy at https://art19.com/privacy and California P

Autonomy in question: The U.S. government declares it no longer considers Hong Kong autonomous from China in a decision that could end the territory's special trade status and further raises tensions with Beijing. The Dow crosses the 25,000 mark for the first time since March, as back-to-work stocks boost U.S. averages. In Brussels, EU Commission President Ursula von der Leyen unveils a €750bn recovery fund of grants and loans to help the bloc fight the unprecedented Coronavirus crisis.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Crossing key levels… U.S. stocks rally with the Dow briefly topping the key 25,000-level and the S&P 500 surpassing 3,000 for the first time since March. Banks lead the strong moves higher, after JPMorgan CEO Jamie Dimon says the lender is “very valuable” at this price and also saying there is a good chance of an economic recovery in H2. The ECB says that soaring public debt levels will put pressure on sovereign bonds but the central bank’s vice-president Luis De Guindos tells this channel that the alternative would be much worse, as Eurozone governments have no other choice but to introduce large stimulus packages in the wake of the pandemic. In corporate news, Commerzbank issues up to €3bn of co-co bonds to shore up its virus-hit balance sheet . And we are live in Hong Kong where tensions continue as lawmakers debate a bill which could criminalise disrespect and criticism of the Chinese national anthem.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/pri

A support system…the Nikkei rallies to a 10-week high after the Bank of Japan pledges to slash rates and increase asset purchases if needed, while the PBOC also vows to continue to support the Chinese economy. In Hong Kong, chief executive Carrie Lam says a new security law proposed by Beijing will not impose on the city's rights and freedoms after police used tear gas to break up weekend demonstrations over the controversial proposal. The World Health Organization temporarily halts trials of hydroxychloroquine over safety concerns, as a study suggests it increases the risk of death and heart problems. And in corporate news, Lufthansa shares soar in the close after the airline agrees a €9bn euro bailout deal that will see the German government take a 20 per cent stake in the flag carrier.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.