Squawk Box Europe Express

Asian markets bounce back after multi-month lows while crude also recovers, having seen its worst week of trading for nine months. Meanwhile, U.S. Vice-President Kamala Harris embarks on a five-day tour of South-East Asia to reassure allies against growing Chinese power and influence in the region. In Germany, with just five weeks before the general election, the CDU and SPD are level in the polls on 22 per cent. Support for Angela Merkel’s party has dwindled recently – its largest drop in public opinion since 2017. And as the chaos in Kabul continues, we hear from NATO Secretary-General Jens Stoltenberg who says the alliance is working hard to evacuate citizens and personnel from Afghanistan, but admits it was blindsided by the speed of the Taliban takeover last week.

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U.S. indices manage to reclaim losses to close broadly flat but in Asia the sell-off continues. Hong Kong’s Hang Seng sinks to a nine-month low while the Nikkei hits its worst levels since January. The world’s largest semi-conductor equipment manufacturer, Applied Materials, reports record Q2 results as Intel’s and Cisco’s CEOs tell CNBC that supply chain shortages will remain for the foreseeable future. Chinese authorities pass one of the world’s strictest data privacy laws in a bid to tackle data theft and online fraud. In retail news, Morrisons supermarket accepts a renewed $7bn takeover bid from private equity firm CD&R, rejecting the previous offer from Softbank-owned Fortress.  

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Fed talk of tapering nudges Wall Street down with FOMC minutes showing plans to pull back monthly bond purchases by year-end. The U.S. presses ahead with booster vaccines despite the WHO advising that poorer nations require the shots first. There are further quarterly earnings beats from U.S. retail and chip makers but Nvidia says cryptochip sales are soft and supply chain delays continue to cause concern. And in tech news, Robinhood revenues double in Q2, however the trading app says that activity is showing signs of slowing. 

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The Dow breaks a five-day winning streak after U.S. retail sales came in lower than expected with a dip in July autos sales. Walmart and Home Depot both experience falling same-store sales but still beat expectations for the quarter. The RBNZ holds rates steady after expectations it would make the region’s first pandemic-era hike. The chaotic evacuations from Afghanistan continue. Many countries have pledged to take in refugees. Brussels says it will not officially recognise the Taliban authorities but has said it will engage in talks to prevent a humanitarian crisis.

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U.S. stocks hit new record highs, with the S&P 500 up 100 per cent from its pandemic bottom in what has been the fastest bull rally since WW2. CNBC hears from Boston Fed president Eric Rosengren who has reiterated his call for the FOMC to begin winding down its asset purchase programme from September. U.S. President Joe Biden stands behind his decision to withdraw troops from Afghanistan as the country falls to advancing Taliban forces. And in China, market regulators continue their tech crackdown, issuing new online competition rules. 

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A raft of key Chinese data misses expectations with growth slowing across retail sales, industrial output and fixed asset investment. Asian stocks stumble and oil comes under pressure. The Taliban takes control of Afghanistan - with President Ghani fleeing the country. But the US stands by its decision to withdraw troops, amid a rushed evacuation of embassy staff and American citizens.

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U.S. markets reach new record highs on surging inflation, but the core number comes in lower than expected. CNBC hears from Dallas Fed president Robert Kaplan who suggests the tapering schedule could be accelerated to begin in October. It’s a big earnings day for European corporates. We hear from NN Group, Bilfinger and Zurich Insurance which sees a 60 per cent jump in H1 earnings and maintains its 2022 guidance. Meanwhile, Chinese autonomous vehicle company Pony.AI has shelved plans to list in the U.S. following Beijing’s continuing regulatory crackdown, yet HKEX CEO Nicolas Aguzin insists that concerns are overblown.  

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The S&P 500 hits its 47th record session this year as weekly jobless claims fall for the third straight week, but factory prices are up. Disney shares surge in after-hours trading with a quarterly beat across the board, driven mainly by doubling subscriptions for Disney +. Meanwhile, China closes down Ningbo - the world’s third-largest port - over Covid concerns, further straining global supply chains. In corporate news, sporting goods giant Adidas finally sells Reebok to Authentic Brands Group for €2bn – that’s €1bn less than what it had originally paid for the subsidiary 15 years ago.

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The U.S. Senate passes a $1tn infrastructure bill with Democrats now focusing on a $3.5tn stimulus package. The Dow and the S&P 500 hit new record highs on the news, but the Nasdaq dips as treasury yields weigh on tech stocks ahead of key inflation data. In corporate earnings, Q1 profit at Lenovo more than doubles. The Hong Kong-incorporated laptop giant says net income margins will widen. Also in tech news, U.S. cyber security firm NortonLifeLock is set to take over Czech rival Avast in a $8.6bn cash and stock deal. Hackers hit blockchain provider Poly Networks with a $500m heist, impacting tens of thousands of accounts.

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The S&P 500 and the Dow falter due to Delta variant spike concerns and the effect it may have on global demand. Energy stocks are particularly lower Stateside. But, some positive macro data could lift sentiment, as U.S. job vacancies hit a record high of 10 million at the end of June while several Fed governors push for a swifter reduction in stimulus measures. Meanwhile, Tencent-backed South Korean video game maker Krafton tumbles on its first day of listing in Seoul on worries of Beijing’s continuing tech regulatory crackdown. In pharma news, Germany’s BioNtech has hiked guidance with Q2 profits hitting almost €3bn on soaring vaccine demand.  

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