Squawk Box Europe Express

China’s largest chipmaker, SMIC, sees its shares nosedive by almost 20 per cent on concerns the company could be blacklisted by the U.S. administration. In Washington, U.S. Treasury Secretary Steven Mnuchin says he expects a deal to fund the government until December to be agreed upon by the White House and Congressional Democrats by the end of this week. Japan’s investment giant Softbank’s shares slide after being branded the ‘Nasdaq whale’ for buying up massive bets on U.S. tech stocks. European Commissioner Paolo Gentiloni tells CNBC that Europe must find a way to counter American tech dominance. Meanwhile France sees a record surge in infection cases, as drugmaker Sanofi says its Covid-19 vaccine could be priced for as low as €10 a shot.

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Selling strikes Wall Street… The Dow sinks over 800 points in its worst day since June, as investors flee tech stocks in an abrupt end to the winning streak. Apple shares plunge 8 percent in the stock's worst day since March, as the tech giant loses $150bn in market value during the session. Asian equities see red, following US majors lower, as big technology firms across the region lead declines. And we are live at the Ambrosetti Forum on Lake Como where the mood among attendees remains cautious amid the market turbulence.

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The Dow Jones enjoys its best day since mid-July, soaring 450 points on the back of strong U.S. factory orders offsetting weaker-than-expected in private payrolls. In China, the Caixin PMI grows for the fourth straight month in August as the service sector sees a surge in hiring for the first time since January. The French government is set to launch a €100bn virus relief package as Covid-19 cases continue to grow. And in corporate news, German lender Commerzbank has announced it will be ditching EY as its auditor as the fallout from the Wirecard accounting scandal continues.

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Starting September with fresh record highs... The S&P 500 and Nasdaq touch new peaks as U.S. manufacturing activity rises to a 19-month high, with new orders jumping to levels not seen since 2004. In Japan, Chief Cabinet Secretary Yoshihide Suga is expected to throw his hat in the ring to fill the void left by outgoing Prime Minister Shinzo Abe. And in corporate news, Swiss pharma giant Roche unveils plans to launch a fast-track Covid-19 test in Europe with results available within 15 minutes.

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China’s Caixin manufacturing activity grows at its fastest rate in almost a decade, driven primarily by new export orders rising for the first time in 2020. It’s a mixed start to September for Asian indices with concerns that the rally seen in August is waning on higher volatility around the U.S. elections. CNBC learns that Chinese video app developer ByteDance has chosen its preferred U.S. bidder for Tik Tok after Microsoft, Wal-Mart and Oracle shares plunge on rumours that the deal may require the green light from Beijing. Zoom shares soar more than 25 per cent in extended trading after revenues rise by 350 per cent following increased demand for video-calling during global Coronavirus lockdowns.   

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Tiktok's sale of its U.S. operations could hit another roadblock after China's Commerce Ministry tightens its regulations on technology exports. Meanwhile, China’s official PMI points to a recovery spurred by demand with services in August growing at a higher rate than July. Chinese manufacturing activity continues to expand in August, but slightly under expectations. In Japan, Abe’s resignation does not deter Warren Buffett’s Berkshire Hathaway from buying stakes in Japan's five leading trading companies, sending shares higher. Asian stocks rise on the final day of trade for the month, after the Dow erases this year's losses and the S&P 500 looks set to have its best August in nearly 34 years. And Nestle makes an offer to buy food allergy prevention expert Aimmune for $2.6bn dollars, as the conglomerate looks to expand its health portfolio

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Japanese Prime Minister Shinzo Abe has resigned over his health. The news caused Tokyo stocks to slide, wiping out about $47 billion of market value, while pushing the yen higher. The Federal Reserve will allow inflation to temporarily overshoot its 2 percent target, in a major policy shift that it hopes will stimulate the U.S. economy. Chair Jerome Powell highlighted the risks to persistently low inflation in a move that is set to see interest rates stay lower for longer. President Trump has formally accepted the Republican nomination for president in the final day of the party's national convention. Trump delivered his speech from the White House, breaking with tradition by using the executive mansion as a political backdrop and defying pandemic guidelines addressing a packed and largely mask less crowd.

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Hurricane Laura makes landfall on the Texas-Louisiana state border - now rated a Category 4 storm. Texas Governor Greg Abbott has warned that Laura’s storm surge is ‘unsurvivable’. Federal Reserve Chairman Jerome Powell is expected to signal a major policy change as global central bankers attend a virtual Jackson Hole symposium. The third night of the Republican National Congress sees a surprise visit to Baltimore by President Trump as renewed racial tensions rage in Kenosha, Wisconsin. Vice-President Mike Pence tells the RNC that Trump’s re-election is fundamental to maintaining law and order. And in media news, TikTok CEO Kevin Mayer has resigned, citing a changing political landscape following the U.S. administration’s moves to ban the Chinese video app for alleged threats to national security.

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Asian indices fail to follow the S&P 500 which hits a third consecutive high despite U.S. consumer confidence falling to a six-year low. The U.S. Gulf Coast braces for Hurricane Laura which is gathering strength towards Texas and Louisiana. Major oil facilities have been evacuated and Brent reaches a five-month peak. The second night of the Republican National Congress defies convention as First Lady Melania Trump delivers her speech at the White House and Secretary of State, Mike Pompeo, from Jerusalem on a diplomatic trip. Trade tensions between Washington and Beijing continue to wane but Mexico’s nominee to lead the WTO tells CNBC the basis of trust and cooperation between the world’s two largest economies has been severely eroded.   

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Asian markets near a two-year high, following the new record set by the S&P 500 on the back of Covid-19 vaccine optimism. Washington and Beijing both signal progress in renewed trade talks. The Dow closes above the 28,000-mark after a major reshuffle which sees Exxon Mobil, Pfizer and Raytheon Technologies substituted by Salesforce, Amgen and Honeywell. At the Republican National Congress in Charlotte, North Carolina, President Trump officially accepts the presidential nomination and warns that Democrats are aiming to ‘steal’ the election in November. And in a world first, there is confirmation a 33-year-old Hong Kong man has been re-infected with Coronavirus for a second time.  

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