Squawk Box Europe Express

The IMF’s managing director Kristalina Georgieva warns of a “confluence of calamities” facing the global economy. Wall Street is on the brink of bear market territory with the Nasdaq suffering its longest losing streak since the dotcom bubble. U.S. President Joe Biden signs off on a $40bn aid package for Ukraine as Russia turns off gas supplies to Finland. Belgium becomes the first nation to introduce quarantine for monkeypox infections.  

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The Dow is on track for its eighth consecutive week in the red – something not seen for 90 years – while the S&P 500 is close to bear market territory. The PBOC is to cut borrowing costs to help the Chinese housing market as Beijing wrestles with the fallout of its zero-Covid policy. The U.S. Senate approves $40bn in aid for Ukraine while G7 finance ministers meeting in Bonn, Germany, commit to almost $20bn in budgetary support for the nation. Credit Suisse CEO Thomas Gottstein receives the backing of the bank after major shareholder Artisan Partners calls for his replacement.  

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Wall Street suffers its worst day since June 2020. U.S. markets broadly sell off amid inflation and growth fears, sparked by a major earnings miss from retailer Target. Asian markets follow suit with tech stocks slumping in Hong Kong while miners and energy companies plunging on the ASX. We hear from U.S. Treasury Secretary Janet Yellen who says that energy sanctions are key to hampering Russian aggression in Ukraine. And global debt balloons to more than $300tn in Q1, raising fears of corporate defaults as interest rates continue on an upward trajectory.

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U.S. Federal Reserve Chairman Jerome Powell insists that the central bank will continue to raise rates as long as is needed in order to rein in inflation. However, Powell did acknowledge the potential consumer pain involved in the process. Investors pump the Nasdaq by almost 3 per cent after swooping in for recently hurting tech stocks, seemingly unconcerned by a looming recession. In retail, Wal-Mart misses earnings expectations despite positive U.S. consumer data for April. And in European banking news, the Unicredit-Commerzbank tie-up is reportedly shelved due to the uncertainty brought on by Russia’s invasion of Ukraine.

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Amazon founder Jeff Bezos and President Joe Biden are at loggerheads over inflation. Bezos has attacked Biden for “misdirection” over claims that billionaire tax avoidance is fueling record price pressures. Former Federal Reserve Chairman Ben Bernanke tells CNBC exclusively that the U.S. is likely to dodge a severe recession, but that it was a “mistake” that the central bank delayed acting on soaring inflation. Chinese tech stocks are higher after positive comments on the sector from JPMorgan. Tesla CEO Elon Musk has not ruled out lowering his bid for Twitter following comments about the amount of bots found on the platform. And in France, President Emmanuel Macron appoints Elisabeth Borne as Prime Minister, the first woman to hold the post in 30 years.

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Sweden and Finland make the historic decision to join NATO. We are live in Stockholm where the Swedish Prime Minister Magdalena Andersson tells CNBC the country is braced for any retaliation from Russia. The G7 warns of a potential global food crisis, accusing Russia of waging a ‘grain war’, while India bans all wheat exports. EU trade commissioner Valdis Dombrovskis says protectionism will only aggravate the issue. April economic data in China is heavily impacted by rolling Covid lockdowns while soaring energy prices boost Saudi Aramco to post its largest quarterly profit since listing.

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U.S. Federal Reserve Chairman Jerome Powell admits that the central bank could have moved faster in raising interest rates and that he was unable to guarantee a ‘soft landing’ as April producer prices soared by 11 per cent. Wall Street caps another volatile session with U.S. stocks suffering their worst weekly performance since January. In crypto news, the collapse of stablecoins Terra and Tether raises fears of contagion in the market as Bitcoin falls to its lowest level in 16 months. And in Schleswig-Holstein, Germany, G7 foreign ministers meet to further underline their support for Ukraine. EU Foreign Affairs High Representative Josep Borrell tells CNBC that the Russian invasion will have far-reaching consequences globally.

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U.S. inflation slows for the first time in nine months, however the headline and core prints still come in above expectation. The Nasdaq suffers steep losses with Apple weighing. The tech giant loses its crown as the world’s most valuable company to oil behemoth Saudi Aramco. Strong Disney+ subscriptions fail to help Disney shares in extended trade after its CFO Christine McCarthy warns of softer streaming growth to come. And in autos news, VW CEO Herbert Diess has defended his call for a negotiated settlement in Ukraine, telling CNBC he is not putting commercial interests ahead of the human cost of the war.  

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Chinese consumer prices are up at their fastest rate in five months as rolling Covid lockdowns continue to impact production and supply. U.S. President Joe Biden has prioritised inflation as his top economic challenge as key data out today hints that price pressures Stateside could be finally peaking. The S&P 500 index and the Nasdaq are up but the Dow posts a fourth-straight negative session. Billionaire hedge fund investor Leon Cooperman says the market has not yet bottomed out. We hear from Finnish foreign minister Pekka Haavisto who says his country is fast-tracking NATO application, possibly moving as early as next Monday.

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The S&P 500 sinks below the 4,000-point level – its lowest in more than a year - as the tech sell-off accelerates. The past three sessions have seen more than $1tn in mega-cap losses. Oil is down on demand concerns while the 10-year Treasury bill reaches its highest level since late 2018. In forex news the dollar is at a near-two decade high while cryptocurrencies are down, with Bitcoin leading the losses. And in autos news, Tesla has once again been forced to halt production at its Shanghai plant over supply issues while CEO Elon Musk hints at a potential agreement with the EU over Twitter’s regulation.

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