Squawk Box Europe Express

Shares in HSBC fall to their lowest level since 1995 in Hong Kong as the bank is implicated alongside Barclays, Deutsche Bank, JPMorgan and others in a series of leaked documents detailing alleged suspicious fund transactions. The White House grants Chinese social media group TikTok one more week to seal a deal with Oracle and Wal-Mart. President Trump has given the deal his nod, but says parent company Bytedance must create a $5bn U.S. education fund. Meanwhile, the U.S. presidential race sees heightened tensions following the death of Supreme Court judge Ruth Bader Ginsburg. Trump has vowed to fill the vacancy by next week.   

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Going public? TikTok considers a U.S. IPO as the Chinese-owned social media group looks to avert sanctions ahead of a weekend deadline set by the Trump administration. In Spain, Bankia and Caixabank join forces to create the country’s largest lender with up to €700bn in assets. Ratings agency S&P puts German finance company Grenke on negative creditwatch as it awaits the result of an accounting investigation. The company’s founder, Wolfgang Grenke has dismissed claims of fraud. And Britain is under pressure from Washington and Brussels over Brexit negotiations.

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The Federal Reserve promises to keep interest rates at record lows until 2023, pushing the S&P 500, the Nasdaq and Asian indices into the red. President Trump says he is concerned about TikTok’s Oracle plan, saying he does not want Chinese tech firm ByteDance to maintain control. He is also seeking payment for the U.S. government’s role in facilitating the deal. And cloud-computing firm Snowflake sees shares surge by more than 100 per cent on its first day of trading on the NYSE.

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The dollar falls on expectations that the Federal Reserve will remain cautious on the outlook for the U.S. recovery. JPMorgan CEO Jamie Dimon tells CNBC that the central bank has so far done enough to prevent a financial crisis. We also hear from Standard Chartered boss Bill Winters who says that continued central bank easing is hurting banks’ profitability. In tech news, Microsoft ups its quarterly dividend by 10 per cent which sends shares higher. This, after TikTok rejected its takeover bid and the White House suggests that a partnership with Oracle is imminent. And Apple CEO Tim Cook unveils a range of new products including a virtual fitness platform, a new iPad and iWatch, as well as a service bundle.   

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The Nasdaq reverses a two-day losing streak as the U.S. Treasury says it will review the proposal for a tech tie-up between Oracle and TikTok. Chinese recovery improves with retail sales rising for the first time in 2020 and industrial production topping forecasts. UBS Chairman Axel Weber is reportedly drawing up a mega-merger plan with rival Credit Suisse to create a wealth management and investment giant. In auto news, FCA and PSA have revised the terms of their tie-up due to virus-related pressures. This will see the special dividend reduced and a planned spin-off delayed.  

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Time is running out… Oracle emerges as the apparent winner for TikTok’s U.S. assets as CNBC learns that ByteDance hopes a “technology partnership” with the American software giant will stave off sanctions. This, after the Chinese group rejected a full-sale offer from Microsoft. Softbank shares surge after agreeing to sell chip designer Arm to Nvidia for $40bn. There are reports the Japanese investor is looking to go private. U.S. biotech firm Gilead is acquiring cancer treatment developer Immunomedics for $21bn as it continues work on its Covid treatment drug Remdesivir. And in the UK, AstraZeneca is restarting trials for its Coronavirus vaccine candidate after last week’s pause over safety concerns, while rivals Pfizer and Biontech expand the scope of their late-stage testing.   

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The S&P 500 and Nasdaq are on track for their second week of losses. Market sentiment is dampened by the U.S. Senate voting down a GOP virus stimulus bill. London and Brussels are at loggerheads after the UK rejects the European Commission’s ultimatum and threats of legal action against the British government over its attempts to unpick the Brexit divorce treaty. Rio Tinto CEO Jean-Sebastian Jacques is stepping down after investors push for more accountability over the miner’s destruction of two Aboriginal sites in Western Australia. President Trump warns that he will not extend next week’s deadline for Chinese tech firm ByteDance to sell its TikTok assets in the U.S.  

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Tech turnaround… U.S. equities snap a three-day losing streak with the Nasdaq posting its best session since April. In Europe, the ECB is expected to hint at further stimulus measures to tackle weak inflation and a strong euro. CNBC learns that Chinese tech company ByteDance is in talks with the U.S. government to avoid a full sale of its video app TikTok, ahead of President Trump’s deadline next week. In luxury news, jeweller Tiffany sues LVMH for dropping its $16bn deal after the French government urged the conglomerate to delay the tie-up amid the threat of U.S. sanctions on French products. And, U.S. House Speaker Nancy Pelosi warns the UK government that there will be “no chance” of a trade deal between London and Washington should the Good Friday Agreement be undermined during the Brexit divorce treaty.

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Tech wreck on Wall Street: a massive sell-off in U.S. tech shares wipes off $1tn from the market cap of the six largest firms. The Nasdaq is plunged into correction territory after losing a further 4 per cent. Tesla loses a fifth of its value in a single session, falling more than 20 per cent in its worst-ever trading day, after the electric car giant is left out of the S&P 500. Asian indices also see red as concerns are raised over Japanese investment titan Softbank’s tech bets. And in pharma news, AstraZeneca halts global trials of its potential Covid-19 vaccine after an unexplained illness during Phase 3 testing.

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Decoupling decisions…President Trump pledges to end America's reliance on China 'once and for all'. But in Beijing, Chinese Premier Xi Jinping says he supports multilateralism while standing ready to face external risks. Investors satisfy their thirst for liquidity, piling into debut trading of Hong Kong water giant Nongfu, sending shares over 80 per cent higher from its listing price. AB Inbev tells CNBC the drinks titan has no comment on a report that the search is under way for a new CEO, amid claims Carlos Brito is looking to step down after 16 years at the helm. And in Brussels, Brexit talks falter which weighs on sterling. However, the head of the EU’s ESM, Klaus Regling, tells CNBC that investors have never been so bullish on the bloc following its response to the Covid-19 crisis.

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