Squawk Box Europe Express

Peloton shares surge after the exercise bike maker announces major overhauls, slashing targets, cutting thousands of jobs and installing a new CEO. It’s a busy day for global earnings, with cost pressures affecting most manufacturers. Toyota quarterly profit tanks 20 percent as the world's largest automaker cuts its production targets amid the global semiconductor shortage. Italian lender Banco BPM swings to a fourth quarter profit - beating expectations on higher revenues and shrinking loan loss provisions. And European leaders agree on the need to show a unified front and pull all the stops to avoid war in Europe, as Russia and NATO continue to mobilise forces.

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Softbank's 66 billion dollar sale of ARM to Nvidia collapses under intense regulatory pressure, with the Japanese investment giant opting to pursue a 2023 IPO for the chip business instead. Still in the chip space, CNBC learns Tesla is tweaking steering components in some made-in-China cars, in a bid to meet sales targets amid the global chip shortage. Meanwhile the SEC subpoenas Tesla over fraud allegations in Elon Musk's tweets. Another big posts a beat. BNP Paribas has an upbeat fourth quarter and sets out a new growth strategy to 2025. CFO Lars Machenil tells CNBC the bank is prepared for any ECB rate hikes. And, US President Joe Biden draws a line in the sand, threatening to put an end to Nord Stream 2 if Russian soldiers set foot in Ukraine - after meeting with German Chancellor Olaf Scholz in DC.

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Chinese stocks kick off the Year of the Tiger on a high following a strong week on Wall Street, which saw the best performance from the S&P 500 so far this year. U.S. 10-year yields surged to their highest level in more than two years following a far better-than-expected January jobs report. Russia-Ukraine tensions continue to brew with Washington saying that Moscow has lined up to 70 per cent of the troops and hardware required for a full-scale invasion of its southern neighbour. German Chancellor Olaf Scholz has defended Germany’s NATO contribution on his way to meet with President Biden. Meanwhile, French President Emmanuel Macron has told newspaper Journal de Dimanche that he believes he can de-escalate the crisis during his visit to meet with President Putin in Moscow today. And in M&A news, shares of fitness equipment maker Peloton soar by more than 20 per cent on reported interest from Amazon and Nike.   

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U.S equities close sharply lower as Meta breaks a one-day record for market cap loss with more than $230bn wiped from its value. However, U.S. futures are buoyed by strong earnings from Amazon and Snap. Tensions are still high in Ukraine and the White House claims Russia is planning a ‘false flag’ incident to force a pretext to invade the country. We hear from Julianne Smith, U.S. ambassador to NATO who says the alliance is keeping the door for diplomacy wide open. BoE governor Andrew Bailey tells CNBC that the higher rate path is still uncertain due to an unpredictable growth outlook. Four MPC members pushed for a larger 0.5 per cent interest rate hike to check ballooning inflation.

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Meta suffers a share wipe-out in extended trade with $210bn disappearing from its market cap. It’s the largest quarterly miss for the company formerly known as Facebook and has caused Nasdaq futures to slide by more than 300 points. The Nikkei also turns red. Streaming platform Spotify plunges despite a beat on the top and bottom line on weak predicted subscription numbers. We are also live at the ECB as well as the Bank of England where a second consecutive rate hike of 25 basis points is expected.

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Google parent company Alphabet posts a big Q4 profit beat and launches a 20-for-1 stock split. We have a slew of European corporate earnings today, too. Spanish lender Santander records more than €2bn in quarterly profits on strong customer growth and Julius Baer reports a record-breaking full year. Swiss pharma giant Novartis is courted by a number of private equity suitors keen on its generic drugs arm Sandoz. We are also live in Kiev, as Russian President Vladimir Putin accuses NATO of having ‘played’ his country over security concerns on the east Ukrainian border.

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UBS overcomes higher litigation costs, reporting a 14 per cent rise in full-year net profit. The Swiss lender launched a new set of ambitious targets to capitalise on recent performance and plans to buy back $5bn of shares in 2022. The S&P 500 wraps up a torrid January in the red – its worse month in two years. In the UK, the fallout from the Sue Gray ‘partygate’ report continues. Prime Minister Boris Johnson has refused to step down but has apologised over multiple breaches of Covid regulations at No.10 Downing Street. And in M&A news, Sony swoops in for video game maker Bungie in a deal worth $3.6bn.

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Wall Street looks set to close the month sharply lower, with the Nasdaq set for its worst month since 2008 as investors prepare for tighter Fed policy. The U.K. targets Russian oligarchs amid red-hot tensions between Kyiv and Moscow, with Foreign Secretary Liz Truss saying new sanctions will send a clear message. In Italy, Sergio Mattarella signs on for a second term as President, after lawmakers fail to agree on a compromise candidate. And, Vodafone comes under activist attack – as Cevian Capital reportedly builds a stake and calls for structural change.

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Apple reports its best quarterly earnings ever, beating expectations for Mac and iPhone sales over Christmas. On a conference call, CEO Tim Cook says that supply chain issues are showing signs of fading. Not so for Tesla, however, with shares dragging down Wall Street during another volatile session on Thursday after CEO Elon Musk sounded a warning over chip shortages. Luxury giant LVMH enjoys record FY profits and sales buoyed by demand for high-end accessories in the U.S. and China. And President Biden has warned Ukrainian President Volodomyr Zelenskyy that an invasion by Russian forces may be imminent after Pentagon reports of further troop build-ups at the border overnight.   

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Federal Reserve Chairman Jerome Powell all but confirms a March rate hike at the next FOMC meeting. He hints there will be more to come, again causing waves on Wall Street. Asian markets and U.S. futures slumped into the red, while short-term Treasury yields neared two-year highs following Powell’s speech. Earnings season is under way with Tesla posting record Q4 results and issuing positive guidance, but CEO Elon Musk admitted continuing chip shortages would constrain new vehicle production. In politics, the U.S. ambassador to Russia hand-delivers Washington’s response to Moscow’s security demands on Ukraine and NATO expansion.

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