Squawk Box Europe Express

Equities have rebounded following their worst week since October. Every S&P 500 sector is in the green with further optimism on the back of earnings due from Pfizer, Exxon Mobil, Amazon and Alphabet. Meanwhile, silver comes off an 8-year high. Posts on WallStreetBets deny retail investor Reddit groups are involved in the price move. U.S. President Joe Biden meets with GOP senators but rejects calls to scale back his $1.9tn virus stimulus bill. Republicans are still hoping for a compromise on the final figure. And in Europe, the vaccine roll-out row intensifies. European Commission President Ursula Von Der Leyen now blames her deputy Valdis Dombrovskis for the climbdown on vaccine export controls. We also hear exclusively from Baker Hughes CEO Lorenzo Simonelli who tells CNBC the energy sector will recover this year as it adjusts to working with the new U.S. administration.  

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U.S. futures suffer a turbulent overnight session following last week’s heavy losses. Silver is now reportedly in the crosshairs of the short squeeze retail investors. In Washington, 10 Republican senators urge President Joe Biden to scale back his $1.9tn stimulus program but Democrats threaten to push the plan through themselves should they not receive support from across the aisle. China posts its slowest pace of manufacturing growth for seven months in January as weakening exports hamper the country’s pandemic recovery. The Burmese military has seized power in Myanmar, detaining both State Counsellor Aung San Suu Kyi and President Win Myint. The army has imposed a state of emergency for up to a year citing alleged election fraud last November. And in Europe, Anglo-Swedish pharma company AstraZeneca has agreed to provide the EU with 9 million more vaccine doses. Following a furious weekend row between London, Dublin and Brussels, the European Commission has u-turned over its threat to implement checks at the Northern Irish border.  

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Wall Street bounces back following its biggest sell-off since October. The retail investor frenzy heats up after Robinhood is slammed for restricting securities trade. But the app’s co-founder Vlad Tenev said the move intended to protect both GameStop and its customers. We hear exclusively from German Finance Minister Olaf Scholz who says that the fiscal measures taken by Berlin should lead the country to 3 per cent growth in 2021. Tensions between Brussels and AstraZeneca continue with German regulators now saying the Anglo-Swedish pharma company’s vaccine should not be given to over-65-year-olds. And in banking news, Commerzbank is set to announce it is axing up to a third of jobs. 

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Wall Street sells off as equity markets suffer their worst session since October, with volumes spiking in the heaviest trading day since 2007. Apple posts its largest-ever quarterly revenue of $100bn as every category sees rising sales. Shares, however, sink in after-hours trading. Facebook stock is also down, with CEO Mark Zuckerberg blaming Apple’s privacy reforms despite the social media giant beating quarterly forecasts. And shares in GameStop see another rollercoaster session rising by 134 per cent before falling as hedge funds scramble to cover short bets.  

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Microsoft shares surge in after-hours trade on the back of strong demand for its cloud services. Guidance has also topped expectations. AstraZeneca has stood its ground over its vaccine roll-out, after Brussels slams the pharma giant for not redirecting UK-bound doses to the bloc. We hear from the GAVI CEO Seth Berkley who says that global supplies will increase soon. In corporate news, Italian lender Unicredit is reportedly set to name Andrea Orcel as its new CEO, while LVMH sees a Q4 sales boom on Asian luxury demand and has promised to pay its dividend at pre-pandemic levels despite net profit falling by more than 30 per cent last year.

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ECB President Christine Lagarde tells CNBC the recovery this year may be “delayed, not derailed” amid further lockdowns and the risk of new virus variants. French Finance Minister Bruno Le Maire says the roll-out of the vaccine programme will be critical. President Joe Biden signs an executive order aiming to ramp up the U.S. manufacturing sector, while German economy minister Peter Altmaier is calling for a more attractive European model. In Italy, Prime Minister Giuseppe Conte is set to strategically resign in a move to seek a mandate to form a new government. And in banking news, UBS Q4 profit jumps by 137 per cent as the Swiss bank says current client activity points to further revenue increases in the first quarter.

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The new Biden administration pushes Republican lawmakers to agree to a $1.9tn Covid relief fund after confirmed U.S. cases surpass 25 million. There is renewed tension over Taiwan with more than a dozen Chinese fighter jets entering the island’s airspace while a group of U.S. carriers led by USS Theodore Roosevelt arrive in the South China Sea. Former PBOC member Li Daokui tells this channel that normalising relations between Beijing and Washington will take time. In Germany, economy minister Peter Altmaier has voiced alarm at the global shortage of microchips for the auto sector. VW has reportedly threatened to seeks damages while Taiwan’s TSMC promises it will ramp up production for car companies.

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U.S. President Joe Biden outlines his Covid-19 battle plan signing more executive orders on his first day in office but warned the virus situation was likely to get worse before things improve. Meanwhile, Wall Street turns its attention to Big Tech with the Nasdaq and the S&P hitting record highs once again. But Intel has had a minor setback as it has been forced to post earnings early due to a security breach after hackers stole sensitive financial information. In Germany, Siemens has beaten Q4 expectations but remains cautious on the global recovery in 2021. And the ECB holds its policy rates steady for January but President Christine Lagarde says the central bank is poised to react with all available instruments to support euro zone economies.

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Joe Biden is sworn in as the 46th President of the United States, putting unity at the heart of his inaugural address. The new commander-in-chief immediately signed 17 executive orders upon entering the White House, some of which reversed Trump-era policies, such as the Paris Climate Agreement and the Muslim travel ban. U.S. equity markets cheered the inauguration, bouncing to fresh highs, but they were also buoyed by a slew of positive quarterly corporate earnings. European Commission President Ursula Von Der Leyen tells CNBC that the EU and the U.S. are on the same page in the need for tech regulation, which will be a key area in U.S.-EU relations moving forward.   

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Joe Biden is to be sworn in as the 46th President of the USA later today. The incoming commander-in-chief’s Treasury Secretary nominee, Janet Yellen, says that the U.S. will eventually afford a higher corporate tax rate and reiterates the need for fresh stimulus to exit the pandemic. Outgoing President Trump says he and his administration have completed what they had come to do in office. Meanwhile, bumper subscriber growth pushes Netflix stock up in after-hours trade. The streaming giant says it is close to becoming free cashflow-positive. U.S. banks kick off earnings season with Goldman Sachs seeing quarterly profits almost double while Bank of America beats on the bottom line but results are tempered by a modest consumer banking performance. And in Italy, Prime Minister Giuseppe Conte scrapes by in a confidence vote but fails to win an outright Senate majority following Matteo Renzi’s withdrawal of his Italia Viva party from the government coalition.

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