Squawk Box Europe Express

UK Prime Minister Boris Johnson is set to announce his new Covid -19 restrictions to parliament, amid concerns the 28-day lockdown may not be enough to control the spread of the virus. In the U.S. an NBC/WSJ polls shows Joe Biden leading President Trump by 10 points a day ahead of the presidential election. President Trump has raised fears of electoral integrity should voting-counting continue past November 3rd. Meanwhile, Asian markets are up across the board on news that Chinese manufacturing activity in October expanded at its fastest rate in a decade.   

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It’s a big day for U.S. tech earnings. Alphabet Q3 numbers soar past expectations after advertising revenue bounced back following its first ever quarterly decline. Apple also beats analysts’ expectations but investor reaction is muted on a lack of guidance and disappointing iPhone sales. Amazon shares see-sawed wildly in extended trading yesterday with stocks initially up on the online retail giant’s 40 per cent Q3 revenue hike. However, they swung into the negative on news of $4bn of virus-related cost-cutting. Meanwhile, Facebook reports a boost in ad sales, but a drop in North American users keeps sentiment flat. Twitter also sees a dip in user growth while revenue came in better than expected.  

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Lockdown 2.0… France and Germany announce fresh national restrictions to combat the second wave of Covid-19 over the coming winter months. U.S. markets plunge as the Dow suffering its worst day since June with investor confidence rattled ahead of next week’s presidential election. Asia-focused lender Standard Chartered beats Q3 pre-tax profit expectations but performance remains tempered by low interest rates and pandemic jitters. Airbus issues its first guidance since the start of the virus outbreak and believes it will break even by the fourth quarter. However, the French aerospace giant warns that the global travel industry recovery continues to stutter.

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Earnings season is in full swing on both sides of the Atlantic. In Europe, all eyes are on Deutsche Bank’s third-quarter data with a focus on its loan loss provision figures and trading levels. Meanwhile, Danish brewing giant Carlsberg posts better-than-expected Q3 numbers, enjoying a strong summer surge in China and Russia as lockdown measures eased. In tech news, Microsoft beats estimates across the board, but shares plunge on less-than-optimistic revenue guidance. And President Trump admits that a virus stimulus deal will not materialise before next week’s election, blaming House Speaker Nancy Pelosi of standing in the way of an agreement.

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Banks are in focus today, as HSBC’s third quarter profit beats expectations but falls 36 percent sending shares higher. The company’s CEO tells CNBC interest rates are expected to remain low. Santander sees net profit treble in the third quarter, but the Spanish bank says it will cut an additional 1 billion euros in costs over the next 2 years.

In the U.S., the Dow posts its biggest one day drop since early September and closing below 28 thousand, as rising cases and stalled stimulus weigh on sentiment. Meanwhile the senate confirms Amy Coney Barrett to the supreme court, cementing a conservative majority in the country’s highest judicial body. President Trump's pick says she will be 'politically independent'. And protests break out across Italy after the government imposes renewed virus restrictions, with some demonstrators in Turin turning violent, attacking police with smoke bombs and bottles.

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US futures come under pressure as America sees a record weekend rise in COVID-19 cases, while Vice-President Mike Pence stays on the campaign trial despite a number of his close aides testing positive. The surge of virus cases in Europe have led the Italian government to impose fresh pandemic measures, putting a curfew on bars and restaurants, and re-closing gyms and cinemas. Prime Minister Giuseppe Conte called on people to 'grit their teeth' and promised economic support through the lockdown. In the tech space, SAP forecasts darker skies ahead, as the German software giant cut its 2020 outlook on weakening cloud revenues. And Jack Ma hails Ant's much-anticipated IPO as the 'largest in history', as reports suggest the listing could top $35bn, with the official pricing expected this week.

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President Trump and Democrat challenger Joe Biden spar in the final U.S. presidential debate. The topics the pair clashed on included the Covid-19 response, healthcare and the state of economy. U.S. markets close on the upside as American jobless claims fall, signalling an improving economy while House Speaker Nancy Pelosi says a virus stimulus bill is nearing agreement. In Europe, up to two-thirds of French citizens are subject to regional curfews as the country records up to 40,000 new cases in a day for the first time. And there is a return to growth in the luxury sector as strong demand in Asia helps L'Oréal and Kering improve their revenues in the third quarter, but both the cosmetics group and the fashion giant warn of an uncertain outlook. In telco news, Huawei’s double-digit quarterly winning streak ends as U.S. sanctions begin to bite.

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Tesla has reported its fifth quarterly profit in a row on accelerated vehicle sales. After-hours trading sees shares higher and CEO Elon Musk believes he can expand production up to 20m vehicles annually. Markets are sceptical of a pre-election virus stimulus deal in the U.S., but House Speaker Nancy Pelosi is optimistic she and the White House are close to an agreement. Spain is the first European nation to record 1 million Coronavirus cases. We hear from Deutsche Post DHL boss Frank Appel who remains confident that the continent’s populace can remain resilient during a potential second wave. And in the UK, sterling surges on renewed hopes of a Brexit trade deal as Downing Street and Brussels signal an intention to break the impasse.  

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Netflix reports its biggest earnings miss ever in Q3 with a sharp slowdown in quarterly subscribers, pushing shares down by more than 5 per cent in after-hours trading. Meanwhile, U.S. futures rise on virus relief hopes. Talks on a stimulus package inch forward but White House Chief of Staff Mark Meadows says certain unresolved issues remain. The OECD Secretary-General Angel Gurria tells CNBC the socio-economic repercussions will outlive the virus itself. This, as the UK records its highest number of daily Coronavirus since June. Meanwhile, Google is hit with a landmark anti-trust lawsuit by the U.S. Department of Justice over alleged unfair practices related to search algorithms and online advertising.

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UBS says it had its best pre-tax Q3 profit in a decade but warns that political instability may result in increased market volatility. U.S. investors wait on stimulus talks ahead the Democrat-imposed deadline for negotiations. But diminished hopes of a deal led US markets to close in the red with the Nasdaq recording its fifth negative session in a row for the first time since 2019. Markets will also keep an eye on the U.S. presidential elections, after it is revealed that the third and final debate between President Trump and his Democrat rival Joe Biden will feature a mute button to avoid interruptions. And in tech news, South Korea’s SK Hynix buys Intel’s memory chip unit for $9bn.  

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