Squawk Box Europe Express

China GDP comes in short of Beijing’s official GDP data with Covid lockdowns affecting growth. President Xi Jinping consolidates his grip on power ahead of a third term in office. In the UK, former chancellor Rishi Sunak is set to become prime minister as soon as today after Boris Johnson withdraws his candidacy. In Italy, Giorgia Meloni is sworn in as prime minister to create the most right-wing cabinet wince WW2. Wall Street posted its best trading week since June amid reports that some Fed officials plan smaller interest rate hikes in the coming months.

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UK Prime Minister Liz Truss quits after just six chaotic weeks in the job. Sterling dips on the news ahead of an accelerated Tory leadership contest. A new Prime Minister is expected to be announced by next Friday. In Brussels, EU leaders meet late into the night with Germany’s Olaf Scholz dropping his country’s opposition to a gas price cap, provided sufficient supplies are secured. U.S. indices are in the red and both the 2- and 10-year yields hit levels not seen since 2008. In corporate news, sportswear giant Adidas cuts its full-year guidance blaming weaker demand in China and in the West and its departure from the Russian market. However, luxury firm Kering shrugs off any recession concerns to post a 14 per cent surge in Q3 sales despite Gucci lagging in China.   

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Tesla beats on the topline but misses revenue estimates which drives the share price down in extended trade. CEO Elon Musk is bullish, saying that the company’s market cap could eventually exceed that of Apple and Saudi Aramco combined. Beleaguered UK Prime Minister Liz Truss is rocked by the departure of Home Secretary Suella Braverman over immigration targets. Wall Street sees the 10-year yield rising to its highest level since 2008. Asian markets follow suit prompting the BoJ to put a floor under bond prices. And in earnings news, Swiss-Swedish industrial titan ABB posts a Q3 beat in orders and revenue and signals it will hit its 2023 margin targets a year early.

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Netflix shares soar in extended shares on the news that the streaming giant has increased subscriber numbers by 2.4m in the third quarter to double expectations. Goldman Sachs tops quarterly earnings forecasts despite revenue and profit falling off. CEO David Solomon tells CNBC the lender is bracing for a downturn in the U.S. Wall Street enjoys a second straight day of gains on strong earnings despite a volatile session. U.S. futures are also set to move higher. New Hong CEO John Lee urges the territory to attract more global talent during his maiden address after Covid restrictions were eased. The EU moves to tackle high gas prices and to avoid an energy bidding war between member states. However it falls short of imposing an energy price cap. 

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UK Prime Minister Liz Truss says she recognises her mistakes and apologises for the way the mini-budget was launched and handled. Her new Chancellor Jeremy Hunt rips up the bulk of her economic programme in a bid to calm jittery markets. On Wall Street, tech stocks fight back, helping the Nasdaq to its best day since July. Bank of America shares surge following better-than-expected Q3 profits on the back of an increase in interest income. CEO Brian Moynihan tells our colleagues Stateside that U.S. consumer remains ‘very solid’. Credit Suisse is reportedly wooing the Abu Dhabi and the Saudi sovereign wealth funds for capital injections into its investment banking arm.   

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Chinese President Xi Jinping opens the Communist Party National Congress, hailing the nation’s battle against Covid while looking to secure a historic third term. Asian markets start in the red following a volatile week which saw the Dow drop 400 points. In the UK, new Chancellor Jeremy Hunt distances himself from his predecessor’s policies, causing the pound to surge. Meanwhile calls for Prime Minister Liz Truss to resign grow. IIF chair Axel Weber warns of a growing gap between monetary tightening and looser fiscal policy. We hear from Mercedes CEO Ola Källenius who says China will remain the car maker’s biggest market but voices concerns that future growth will be vulnerable to geo-politics and supply chain constraints.  

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US stocks stage a massive comeback, with the Dow swinging 1,500 points, despite US CPI coming in hotter than expected. Chinese consumer prices rise by the most in more than two years, as the country's ruling party prepares to usher in a historic third term for President Xi Jinping. Kwasi Kwarteng heads home early from IMF meetings, amid speculation the government is considering yet another U-turn over its controversial ‘mini-budget’. However, the U.K. Chancellor says he is committed to the plan. LVMH's Antoine Arnault hails the resilience of the luxury sector throughout the pandemic, telling CNBC the stronger dollar is now boosting sales.

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The Bank of England snaps up £4.4 billion in Gilts in its biggest daily move so far, as the emergency programme enters its final 48 hours. U.K. Prime Minister Liz Truss says she will stick to her plans to not cut public spending. ECB hawks Robert Holzmann and Pierre Wunsch tell CNBC they expect rates to keep rising despite fears of a looming recession, with the benchmark rate possibly topping 3%. The Fed comes under further pressure in its inflation fight, with food and energy costs causing wholesale prices to rise more than forecast last month. EU energy ministers agree on plans for a joint gas buying scheme, but fail to strike a deal on a price cap.

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Sterling see-saws after a report the Bank of England is preparing to extend its emergency bond-buying programme, despite Governor Andrew Bailey's message to markets that funds have just three more days to rebalance their positions. The International Monetary Fund slashes its global outlook and warns the world is on the brink of a 'painful' recession. Chinese authorities ramp up covid testing across some of the country, days ahead of the Communist Party Congress. In corporate news, LVMH toasts a third quarter sales beat, as the luxury giant sees a boost from the stronger dollar, with American tourists splashing out in European stores.

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JPMorgan CEO Jamie Dimon speaks exclusively to CNBC, saying U.S. stocks could double their losses on the year and defending the U.S. Government’s new restrictions on tech exports to China. A slump in semiconductor stocks sends the Nasdaq to a two-year low while selling continues in Asia, as chip giants in Taiwan, Japan and South Korea react to new US action against China. President Biden vows to deliver more air defense systems to Kyiv after Russian missiles strike cities across Ukraine, killing 14 and damaging key civilian infrastructure. Gilts come under renewed pressure after separate moves by the Bank of England and the U.K. Chancellor fail to quell concerns over Prime Minister Liz Truss’ economic strategy.

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