Squawk Box Europe Express

Will it be 'one and done'? U.S. stocks drop sharply as the Federal Reserve cuts rates by a quarter point for the first time since 2008. However, Chairman Jerome Powell suggests that this may not be the start of more easing to come, calling it a ‘mid-cycle’ move. The dollar jumps and the yield curve flattens on the news, but President Trump voices his disapproval of the decision. Bank earnings are also in focus. Standard Chartered beats H1 profits estimates but warns of trade tensions and lower interest rates on the horizon, while Societe Generale’s second-quarter net profit is hit by restructuring costs. Elsewhere on the corporate front, Siemens warns of weakness in some of its key markets, after third-quarter profits fall, missing expectations.

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This hasn't happened in more than a decade. Squawk Box anchors preview today’s blockbuster U.S. Federal Reserve decision with the central bank poised to cut rates for the first time since the financial crisis. Apple shares jump in after-hours trade as the tech giant beats expectations and returns to growth in the third quarter, but iPhone sales miss estimates. It’s also a big earnings day in Europe with banks front and centre. Credit Suisse sees second-quarter net profit jump 45 per cent amid high levels of client engagement. French rival BNP Paribas also posts forecast-beating numbers due to a strong performance in its corporate and investment banking arms.

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The focus today is on central banks with the Bank of Japan holding rates steady but markets anticipating a 25-basis point cut from the U.S. Federal Reserve. President Trump, however, insists that ‘a small cut is not enough’. Asian stocks move higher as trade talks between Washington and Beijing resume in Shanghai and earnings are expected from Chinese tech giant Huawei. Sterling plunges to a 28-month low as Prime Minister Boris Johnson angles the U.K. to a no-deal Brexit saying that the withdrawal agreement negotiated by former PM Theresa May is now dead in the water. Also, in corporate news, meat substitute company Beyond Meat sees its shares fall in after-hours trading on plans to sell more shares. Its sales however, have increased three-fold in the second quarter. 

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The London Stock Exchange is set to expand its portfolio, confirming that it is buying data analytics platform Refinitiv for $27bn. In Asia, markets have been wary ahead of upcoming trade talks between Washington D.C. and Beijing with investors anticipating a rate cut from the Federal Reserve later this week. The unrest continues in Hong Kong with police firing rubber bullets and tear gas at pro-democracy protestors. It’s the eighth consecutive weekend of violence and Beijing is expected to speak out about the clashes. And in Vienna, Iranian diplomats hail ‘constructive’ emergency talks over the nuclear deal but also warned that Tehran will reduce its commitments should the remaining parties in the JCPOA fail to look after its interests.

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A mixed session for Asian and U.S. stocks following concerns over central bank movements. The Federal Reserve is expected to be less aggressive next week but ECB president Mario Draghi has drawn the ire of the German banking association after he signaled a potential fresh round of stimulus. We discuss the market mood live at the first-ever Salzburg Summit. In corporate news, Amazon’s record profit streak finally comes to an end with Q2 data missing but Alphabet beats expectations and announces a $25bn share buy-back. We also have earnings from Signify and Pearson.

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It’s a massive day of earnings on both sides of the pond. Tech stocks lead the S&P 500 and Nasdaq to fresh peaks, while Facebook’s Q2 results fly in the face of recent regulatory concerns. Tesla, however, sees shares plunge as second-quarter earnings fall short of estimates. We also have quarterly results from Roche, Unilever, AstraZeneca, Anglo American, Valeo and Diageo. The euro hovers near two-month lows against the dollar ahead of today’s rate decision amid the prospect of more easing from the European Central Bank. And in the UK, new Prime Minister Boris Johnson assembles his new cabinet with a decidedly pro-Leave character, vowing to deliver Brexit by Halloween.

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Squawk Box anchors talk to Annette Weisbach about Deutsche Bank's bigger-than-expected second-quarter loss, as its major overhaul eats into the bottom line. Autos are another big theme on the show, as Daimler swings into the red in the period, while French rival PSA Group surprises to the upside. Overall, Chinese stocks follow Wall Street higher as sources tell CNBC that U.S. trade negotiators will visit Beijing for face-to-face talks next week. Amazon, Alphabet and Facebook dip after hours after the U.S. Department of Justice launches a sweeping antitrust probe into the tech giants. Shares in Snap, however, smash Wall Street Q2 estimates on the back of strong user growth. In the UK, Boris Johnson is set to take over as Prime Minister today, following a decisive victory in the Conservative Party leadership race.

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Earnings season heats up with Swiss bank UBS beating on the top and bottom line, delivering its best second quarter in 9 years. CEO Sergio Ermotti tells CNBC the strong performance comes despite interest rate uncertainty. Santander also tops forecasts but second-quarter profit drops on restructuring costs relating to Banco Popular. In the U.S., technology stocks rally ahead of key reports from Facebook, Alphabet and Amazon. In the UK, foreign minister Jeremy Hunt calls for the formation of a European maritime mission to counter Iranian threats in the Gulf, but the focus is on the reaction from Downing Street, as Boris Johnson is expected to be named Conservative Party leader today.

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International strife in the Strait of Hormuz drives oil prices higher. The U.K. government calls the seizure of a British-flagged oil tanker by Iranian commandos ‘an illegal act’. Chinese technology stocks soar on their first day of trading on the STAR market, Shanghai’s new exchange is aimed at rivalling the Nasdaq. In Japan, the ruling bloc falls shy of a super-majority in Upper House elections. The result could hamper Prime Minister Shinzo Abe’s push for constitutional reform. And there are chaotic scenes in Hong Kong with pro-democracy demonstrators clashing with authorities during the seventh consecutive weekend of violence in the territory.  

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Asian stocks get a boost at the end of the week following dovish comments from New York Federal Reserve president John Williams and Federal Reserve vice-chairman Richard Clarida about a possible rate cut later this month. Tensions in the Gulf bump oil prices higher following the taking down of an Iranian drone by a US Navy vessel. In corporate news, Microsoft shares soar to a record high following a 12 per cent rise in Q4 sales fuelled by its cloud service. Meanwhile, Boeing will take a near-$5bn tax hit as a result of the on-going grounding of its troubled 737 Max planes.

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