Squawk Box Europe Express

Iran hits back… Tehran launches more than a dozen missiles, targeting U.S. military bases in Iraq, in retaliation for the assassination of General Qasem Soleimani. Asian stocks sell off, while the Dow points lower amid the escalation in the U.S.-Iran crisis. Oil and gold initially surge, but cap gains as President Trump plays down the impact of the latest attacks. In an apparently separate incident in Iran, a Ukrainian Airlines Boeing suffers technical problems and crashes after take-off. According to state media, all 170 passengers on board are believed to be dead. And in Lebanon, the world’s media awaits former Nissan CEO Carlos Ghosn’s first press conference following his surprise escape from house arrest in Japan. His Japanese legal team has accused the auto maker of ‘perversion of truth’ leading to the financial misconduct charges brought against him.

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Knock-on effect… Wall Street pushes Asian stocks into the green after the Nasdaq posts its biggest intra-day comeback for three months, with Alphabet hitting a new record high. Geo-political fears keep gold prices at a seven-year high as Iranians hold mass funeral processions for Qasem Soleimani throughout the country. NATO says that a full-blown war between the U.S. and Iran is in nobody’s interest and Washington denies it will be withdrawing U.S. troops from Iraq due to the recent unrest after an internal memo leak. And in auto news, Tesla’s market value reaches $80bn for the first time as the Model 3 saloon car rolls off the production line in Shanghai.

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Upping the ante… Iran withdraws from the 2015 nuclear accord and vows to expel the U.S. from the Middle East following the funeral of military commander General Qasem Soleimani, who was killed by an American airstrike last week. The soaring tensions have caused Asian stocks to sink and oil prices to spike as President Trump threatens to hit 52 Iranian sites in case of retaliation, as well as sanction Iraq. In Japan, there are moves to tighten immigration rules as prosecutors break their silence following the escape of former Nissan chairman, Carlos Ghosn, calling his actions ‘illegal and unjustifiable’. Pro-democracy protests in Hong Kong show no signs of abating and have continued near the border with China following the appointment of party-faithful official Luo Huining to run the Hong Kong Liaison Office.

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Oil prices soar following Pentagon confirmation that a drone strike has killed Iran’s top military commander in Baghdad. President Trump had ordered the strike following the storming of the U.S. embassy complex in the Iraqi capital which had been approved by General Qassim Soleimani. Iran’s foreign minister has slammed the U.S. action as ‘rogue adventurism’. The rising tensions between Washington and Tehran have impacted gains in Asian stocks and U.S. futures are set to open lower following yesterday’s new record highs. The dollar has slumped against the yen and gold has surged to a nine-month peak as a result of the escalating frictions.    

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New Year Records…the S&P 500 has closed 2019 with its best annual gain for six years while Netflix was crowned the index’s top-performing stock, increasing value by 4,000% in the past decade. Beijing cuts its reserve requirement for banks once more, boosting Chinese stocks and offering the economy a $115bn fillip. Hong Kong is once again wracked by violence with anti-government protestors holding their first rallies of the new year. There has also been further violence in Baghdad where U.S. troops have driven back pro-Iranian militia supporters who had stormed the American embassy compound. Also, speculation rises over how ousted Nissan chairman Carlos Ghosn managed a remarkable escape from Japan, where he was awaiting trial for financial misconduct in April.

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Gone AWOL…ousted Nissan chairman Carlos Ghosn flees Japan where he has been awaiting trial for financial misconduct. Ghosn has arrived in Beirut saying that he will ‘no longer be held hostage’ by a rigged Japanese legal system. The U.S. market rally finally falters with stocks notching their worst day in a month but Wall Street can boast its best performance in six years overall. In Asia, Chinese stocks haven’t fared much better on the last day of trading this year despite manufacturing numbers beating expectations. Huawei has managed to shrug off the effects of U.S. blacklisting, hitting a record $122bn in revenue. The Chinese tech giant is, however, expecting a tricky 2020 saying that ‘survival’ is its no.1 priority.

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Relief rally…Chinese stocks outperform after the S&P 500 posts a fifth consecutive week in the green on the back of optimism surrounding the U.S.-China phase one trade deal. Washington launches airstrikes on Iran-sponsored militias operating in Iraq and Syria following the killing of an American contractor and warns Tehran of further military action. In auto news, Tesla begins deliveries of its Chinese-built Model 3 just one year after construction of the Shanghai Gigafactory began. And Nissan has reportedly called for sweeping spending cuts as a string of executive scandals and partnership tensions with Renault weigh on sales and profit.

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A Santa rally: The Dow Jones hits another record high following a stellar performance throughout 2019. Boeing forces out CEO Dennis Muilenberg following the production halt of its problematic 737 Max airliner last week. Board member David Calhoun is now poised to take the reins in January. German car giant BMW announces it is under investigation by the Securities & Exchange Commission over its sales reporting in the U.S. And in energy news, Russian prime minister Dmitry Medvedev shrugs off the threat of U.S. sanctions on the Nord Stream 2 project, promising the Baltic Sea pipeline linking Russia and Germany will be operational within the next few months.

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Wall Street looks set to end the decade with a bang. The S&P 500 is up by almost 190% since 2009. Asian stocks see red ahead of Christmas, despite news that China will cut import tariffs on a range of products from January 1st, as both President Trump and Xi Jinping say the Phase One trade deal will be signed soon. In energy news, Berlin and Moscow accuse Washington of interference over U.S. sanctions linked to the Nord Stream 2 pipeline project in the Baltic Sea. And in India, Prime Minister Narendra Modi remains defiant in the face of nationwide protests and violence over controversial new citizenship legislation.

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The S&P 500 tops 3,200 for the first time ever as U.S. Treasury Secretary Steven Mnuchin tells CNBC that ‘phase one’ of the trade deal with Beijing will be inked in early January. There'll be a new boss at Threadneedle Street. The FCA's Andrew Bailey is set to take over from Mark Carney as the Bank of England governor from February. We hear exclusively from the new European Union economy chief, Paolo Gentiloni, who tells this channel that monetary policy alone won’t be enough to move the bloc out of the doldrums. And in Washington, President Trump demands a speedy Senate impeachment process but looks to be frustrated by House Speaker Nancy Pelosi who intends to push the GOP to meet Democrat procedural demands.

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