Squawk Box Europe Express

President Biden hails a bipartisan deal between senators on his $1.2tn infrastructure deal but he faces criticism from Republicans over further spending plans. The news buoys Wall Street with the S&P 500 and Nasdaq hitting record highs as construction stocks lead the way. In Brussels, there is a rift between the 27 EU nations, with Poland and the Baltic States rejecting France and Germany’s calls for a leaders’ summit with Russian President Vladimir Putin. And Chinese ride hailing firm Didi Chuxing seeks a New York listing which could be valued in excess of $60bn in what could be the biggest IPO of 2021.

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There’s a mixed picture in the U.S. markets as the Nasdaq hits a new record high but the Dow and S&P 500 snap two-day winning streaks on the back of continuing inflation fears. Treasury Secretary Janet Yellen, however, says that price pressures should abate later in the year. U.S. Secretary of State Antony Blinken has begun a European tour, first meeting German Chancellor Angela Merkel in Berlin to discuss strategies on containing China. There are reports that Washington may sanction solar products made in China’s Xinjiang province over alleged human rights abuses in the Muslim-majority region. Hong Kong’s last remaining pro-democracy newspaper, Apple Daily, prints its last ever edition after its assets were frozen by Beijing and a series of journalists’ arrests were made under the SAR’s new National Security Law. 

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The U.S. markets rally continues with investors focusing on growth stocks. The Nasdaq closes on a record high while the S&P 500 nears a new peak and the Dow enjoys its best day since March. Congress hears from Federal Reserve Chairman who says the central bank will not waver by raising rates too soon on fears of surging inflation. Brussels green-lights Rome’s recovery plan with €190bn set to be dispersed. UK Foreign Secretary Dominic Raab is in Vietnam in a bid to create close trade ties with Pacific nations, accessing the CPTPP bloc.

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U.S. equities surge back into the green following last week’s post-Fed sell-off, with the Dow posting its best day since March. However, Fed Chair Jerome Powell warns of a continued threat to the economy from the pandemic but says price pressures remain transitory. In France, media giant Vivendi comes under activist investor scrutiny as it attempts to spin off its Universal Music arm. We speak to LVMH CFO Jean-Jacques Guiony who says the luxury brand is finally overcoming the stuttering restart of global tourism, just as the iconic Parisian department store La Samaritaine reopens to much fanfare after a 16-year closure. 

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The Nikkei leads sharp declines across Asia after Wall Street posts its worst week since October, with markets continuing their post-Fed slump amid a more hawkish shift. Morrisons braces for a bidding war as a US private equity firm reportedly continues its pursuit of the British grocer, after the group rejects a 5 and a half billion dollar takeover attempt. Bill Ackman's SPAC buys a 10 percent stake in Vivendi's Universal Music Group for 4 billion dollars, as shareholders prepare to vote on the spin-off and listing set for September. And HSBC posts its worst day in 9 months after taking a 2 point 3 billion dollar hit on the sale of its French retail bank, as Europe's largest lender sells the troubled unit for just 1 euro.

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'The recovery is just beginning'. As European finance ministers hail the economic turnaround ahead of today's talks on tax and growth, we hear from the Finance Minister of Luxembourg. In markets, the Dow struggles for the second straight day as markets digest a more hawkish Fed, while formerly red-hot commodity plays lose some steam, weighing on industrial stocks. Core inflation rises for the first time in a year in Japan -- while the BOJ joins the list of central banks keeping rates on hold and policy steady -- warning the economy remains in a "severe state". And Juneteenth becomes a federal holiday in the US, commemorating the end of slavery in America

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The U.S. Federal Reserve speeds up its timeline for hiking rates and also increases its inflation guidance. Wall Street plunges into the red as a result. We hear from Man Group CEO Luke Ellis who warns that there are more ‘scary’ price prints to come over the summer. In Geneva, Presidents Biden and Putin hold ‘constructive’ talks and agree to continue the dialogue on cyber warfare and arms control. Meanwhile, Novartis CEO Vas Narasimhan tells CNBC that future pandemics are a certainty but says the Covid outbreak has taught the world some valuable lessons about preparedness. 

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The EU has excluded 10 banking giants from participating in its Covid recovery fund bond sale. Big names such as JP Morgan, Natwest and Bank of America have reportedly been blocked over previous involvement in market-rigging scandals. Meanwhile, Brussels and Washington end their 17-year feud over aircraft subsidies. European Commission President Ursula Von Der Leyen has welcomed the ‘new chapter’ but warned that work remained to be done. In Washington, the Federal Reserve is not expected to make any sudden rate moves during its two-day policy meeting, sending markets lower as investors hunt for signs of a rate hike timeline. Presidents Biden and Putin are to meet in Geneva today. The Kremlin warns that common ground on a host of issues may be sparse. And CNBC hosts its inaugural Evolve Global Summit, bringing together leaders and innovators for a new era of business.

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NATO members meet in Brussels and double down on criticism of Chinese expansionism. Moscow is also labelled a security threat. U.S. President Joe Biden fired a warning to Russian President Vladimir Putin over the welfare of jailed opposition politician Alexei Navalny. The U.S. and the EU are reportedly set to end a 17-year feud over aircraft subsidies. In the UK, Prime Minister Boris Johnson delays ‘Freedom Day’, keeping the country locked down by up to a month to combat the spread of the Indian variant. And in M&A news, Third Point’s Daniel Loeb and Pershing Square’s Bill Ackman vie for French media group Vivendi as it looks to spin off Universal Music Group. 

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G-7 leaders in Cornwall claim they have reached consensus on tax, climate change, infrastructure and the vaccine rollout, but they face criticism over a lack of concrete action. Brexit was also in focus with UK Prime Minister Boris Johnson vowing to do whatever it takes to conserve the union while Canadian PM Justin Trudeau tells CNBC that the Irish border was an integral part of his bilateral talks at the summit. We also hear from NATO secretary general Jens Stoltenberg who says that while China is not an enemy of the alliance, it is a cause for concern. 

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