Squawk Box Europe Express

Asia rebounding: equities across the continent trade higher as China reports a slowdown in the increase of Coronavirus cases, and Japanese exports fall less than expected. In the U.S., Apple closes almost 2 per cent lower after its revenue warning, dragging on the Dow Jones, but the Nasdaq ekes out another record close. The outbreak is already causing havoc for Jaguar Land Rover with the auto maker resorting to flying parts out of China in suitcases. CEO Ralf Speth tells this channel that his supply chain will be under threat in a fortnight. And in an NBC/WSJ poll, Bernie Sanders is in the lead in the Democratic primary race with Michael Bloomberg increasing his figures. The billionaire media tycoon has said he would sell his company if elected president.  

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A shock warning… Apple says it will fail to meet quarterly revenue guidance, as the coronavirus outbreak disrupts iPhone sales and weighs on demand. Asian Apple suppliers sell off, dragging on the broader equity markets. HSBC says 35,000 jobs will be lost over the next 3 years amid the lender's strategy overhaul. The bank's shares see red in Hong Kong after full-year profit misses expectations, falling 33 per cent. In commodities news, strong iron ore prices help lift half-year profit at BHP but the miner still posts a slight miss, as CEO Mike Henry tells CNBC the coronavirus impact has been limited. In Italy, Intesa Sanpaolo makes a nearly €5bn bid for UBI Banca, which could create the eurozone’s seventh-largest bank. And Facebook’s CEO Mark Zuckerberg is in Brussels where the EU’s industry commissioner saying the social media giant must adapt to the bloc’s rules rather than the other way around.

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More cases confirmed: China reports more than two thousand new cases of coronavirus, pushing the death toll to over 1,700. In response, Hubei province bans all vehicle traffic while France reports the first death outside Asia. Chinese stocks jump as the PBOC cuts its medium-term lending rate by 10 basis points, in an effort to curb the economic impact of the virus. Elsewhere in Asia, recession fears rise as Japan's GDP contracts by more than 6 percent in the fourth quarter. BoJ Governor Kuroda says the coronavirus is the top risk facing the world's third-largest economy. In the aerospace industry, Airbus says it 'deeply regrets' a US decision to hike tariffs on European-made aircraft, as the White House trade office raises the stakes in the 15-year long dispute over subsidies. In Europe, the U.S. warns nations against doing business with Huawei, as Defense Secretary Mark Esper tells CNBC exclusively that Washington is spending hundreds of millions of dollars to find a viable 5G alternative.

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Assessing the economic impact of the coronavirus. Chinese officials say over 63,000 people have now contracted the disease, as President Donald Trump's top economic advisor criticizes Beijing's response. Larry Kudlow tells CNBC “we thought there was better transparency coming out of China, but it doesn't appear to be. I know they revised their numbers up a bit. They say it's a different method of counting. We just don't know. It's the great unknown.” Meanwhile, S&P Global has warned China that it could see its credit rating downgraded, if it were to fight the economic impact of the virus with ramped-up fiscal spending. We discuss updated forecasts for the Chinese economy, and Europe’s biggest economy, as Germany prepares to release its latest GDP figures. The CEO of German industrial gases company Linde tells CNBC in an exclusive interview that he cannot think of a country, “where the industrial production rates are actually higher going into 2020 than 2019.”

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China sees a sharp spike in new coronavirus cases and fatalities prompting Beijing to revise its method for counting infections. The Chinese government also dismisses senior Hubei province officials for their handling of the outbreak. Earnings take centre stage in Europe. Credit Suisse CEO Tidjane Thiam oversees his final set of earnings at the helm of the Swiss bank, after it lowered its profitability target for the fourth quarter, but some analysts expect a positive surprise in the bond business. Restructuring costs drag rival Commerzbank into a net loss for Q4, causing the German lender to cut its dividend for the year. Finally, we speak to the boss of health and nutrition company DSM about the coronavirus outbreak. He tells CNBC that most operations in China are still running.

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Confident but cautious...Federal Reserve Chairman Jerome Powell tells Congress that the U.S. economy remains very resilient but acknowledges that the ongoing coronavirus is still a threat – this on the day that China confirms its lowest number of new cases since late January. In the New Hampshire Democratic primaries, Senator Bernie Sanders pips Iowa caucus winner Pete Buttigieg to victory and leaves former Vice-President Joe Biden trailing in fifth place. Shares in Softbank surge on the judicial approval of the Sprint-T-Mobile tie-up but a series of bad investment decisions weigh on the Japanese tech giant, driving quarterly operating profit down 99 per cent. It’s better news for Heineken, which reports a solid set of fourth-quarter earnings but cautions it’s too early to assess the full impact of the virus outbreak. And we are live in Cairo at Egypt’s petroleum show, EGYPS 2020, where U.S. Assistant Energy Secretary Frank Fannon tells CNBC that Europe is set to find itself in a gas and LNG supply tug-of-war between the U.S. and Russia.  

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The coronavirus claims its 1,000th victim with more than a hundred new cases confirmed in a day. A number of Chinese officials have been removed over their handling of the outbreak, while more economists update their growth forecasts. Analysts at Citi slash their first-quarter China GDP guidance to 3.6 per cent. Italian luxury winter couture brand Moncler has also given a cautious outlook due to a ‘critical’ business environment in China where store footfall has plunged by up to 80 per cent. Asian equities, however, have followed U.S. stocks higher with Amazon pushing the S&P and Nasdaq onto fresh record highs. And on the earnings front, travel operator TUI says the grounding of the Boeing 737 Max continues to weigh on profits, but withholds comment on the impact of the virus outbreak. German luxury car maker Daimler slashes its dividend amid its latest profit warning.

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China tries to get back to work amid the Coronavirus outbreak. Numerous major factories in China reopen, including plants belonging to BYD, Tesla, Daimler and Ford. The iPhone supplier Foxconn also gets the green light to restart work at a key plant but Apple and Alibaba opt to keep their facilities shut. The death toll from the virus surpasses 900, following its biggest daily increase yesterday, with more than 40,000 cases confirmed globally. Asian stock markets start the week in mild negative territory. In Germany, Daimler is reportedly planning on cutting up to 15,000 jobs which could save the luxury car and truck maker up to €1.4bn a year by 2022. And we are live in Dublin where the nationalist Sinn Féin party is poised to enter government after winning its highest ever number of first preference votes in the Irish general election.  

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U.S. President Donald Trump reportedly goes ‘apoplectic’ during a phone call with UK Prime Minister Boris Johnson over his decision to choose Huawei for Britain’s 5G roll-out. This as the U.S. Attorney General William Barr urges the state to buy shares in Ericsson and Nokia to help create viable Western competitors. CNBC learns that Elliott Management has moved to acquire a $2.5bn stake in Softbank following Masayoshi Son’s WeWork misstep. Meanwhile, Chinese stocks look set to mark their worst week in nine months as the Coronavirus shows no signs of abating. The doctor credited with raising the alarm about the outbreak has died in Wuhan, as the overall death toll surpasses 600. The spread of Coronavirus is also being felt in the automotive sector with Fiat Chrysler warning it may shut down a European plant should Chinese factory closures affect its supply chain. And in corporate news, ride-hailing app Uber has said it hopes to turn profitable by Q4 2020 despite an expected loss of $1bn this year.

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A Valentine’s Day surprise…Asian stocks rise on the back of an unexpected decision by Beijing to halve tariffs on nearly 2,000 U.S. goods on February 14th. But the spreading Coronavirus is weighing on companies around the world. Tesla says a delay in deliveries has reversed a six-day rally while Yum China has warned of Q1 losses. Nike, Disney and Qualcomm are also bracing for disruption to business. In energy news, oil prices are up with markets banking on a production cut from Opec and its allies as a technical meeting between the producer nations runs over into a fourth day. We also have earnings from French banking giant Société Générale, which drops a reference to a key profitability target, and we speak to the CFO of Dutch lender ING who warns of a challenging environment amid negative interest rates.

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