Squawk Box Europe Express

U.S. stocks hit reverse on July’s gains, with the S&P 500 putting in its worst day in three weeks. In Europe, earnings from Novartis, Alstom and SAP dominate the headlines, while Netflix shares sink after a big miss for Q2 subscriber growth. Facebook’s cryptocurrency Libra keeps finance ministers on edge at the G7 meeting in Chantilly, France. And Amazon shares come under pressure after the European Commission launches an anti-trust investigation into how the online retail giant uses merchants’ data.

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A little way off record highs and a long way to go on a trade deal. U.S. stocks snap their winning streak as President Trump casts doubt on the progress of negotiations between the U.S. and China. Ahead of the G7 summit in Chantilly, France, Federal Reserve Chairman Jerome Powell reiterates that he will ‘act as appropriate’ to sustain the U.S. economic expansion amid increased global uncertainty. In Strasbourg, Ursula Von Der Leyen becomes the first female European Commission president, winning over MEPs with her vision of a greener, fairer Europe. In Washington, Facebook faces scrutiny over its plans to launch cryptocurrency Libra, while the Swiss firm set to oversee the currency’s privacy tells CNBC that is has yet to hear from the social media giant.

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U.S. markets continue to break records but investors remain cautious about the health of the economy ahead of the upcoming earnings season. Facebook’s cryptocurrency Libra has come under more criticism, this time from U.S. Treasury Secretary Steven Mnuchin who has voiced concerns it could be used for illicit activities. In the UK, Tory Party leadership candidates Boris Johnson and Jeremy Hunt harden their Brexit stances but outgoing Chancellor Philip Hammond tells CNBC that he will do what he can to prevent a no-deal Brexit. And we’re live in Brussels where German defence minister Ursula Von Der Leyen faces a knife-edge vote which could make her the European Commission’s next president, or potentially cause an institutional rupture within the bloc should she not succeed.

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Squawk Box anchors discuss the slowdown in Chinese Q2 GDP – at 6.2% it’s the lowest quarterly growth in 27 years. In Hong Kong, protests flare up again with demonstrators demanding the resignation of city CEO Carrie Lam. AB Inbev postpones its Budweiser IPO blaming weak demand which, at $9.8bn, would have been the biggest listing this year. We’re also live in Dubrovnik where the IMF and Croatian National Bank are holding a CESEE event. The leadership race to find the next managing director of the IMF is heating up.   

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Another milestone for U.S. stock markets with the Dow breaching the 27,000 mark for the very first time, a day after the S&P tops 3,000.The Federal Reserve chairman Jerome Powell has kept July rate cut hopes alive, saying that the central bank would respond to increasing global risks. In addition, Powell voiced concerns over Libra during his Senate testimony while President Trump has also hit out at Facebook’s crypto-currency, saying it will have “little standing”. He also slammed Beijing for not sticking to trade promises ahead of June Chinese trade data being released. And in corporate news, China’s Fosun Tourism Group prepares a £750m capital injection into ailing UK firm Thomas Cook.  

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U.S. equity markets hit fresh highs and the S&P 500 crosses the 3,000 level after Federal Reserve Chairman Jerome Powell sets the stage for an ‘insurance’ cut later this month. President Trump launches a probe into France's proposed tax on tech firms, sparking concerns the move could lead to more tariffs between the U.S. and Europe. And oil prices hit their highest level in six weeks as producers in the Gulf Mexico cut their output ahead of what could be the first major storm of the hurricane season.

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Waiting for the Fed. Equity markets trade cautiously as central bank chairman Jerome Powell prepares to begin his 2-day testimony on Capitol Hill. Trade talks are back on, with a ‘constructive’ phone call between Washington and Beijing breaking the U.S.-China stalemate. Chinese factory inflation falls flat for the month of June following almost three years of unbroken growth, raising fears of a manufacturing slowdown. And in corporate news, Airbus is set to leapfrog Boeing as the world’s largest plane maker as the U.S. firm sees deliveries slide by 37%.

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‘The extradition bill is dead’. Squawk Box analyses the impact of the scrapping of the controversial Hong Kong legislation following months of protests and civil unrest. Shares in Deutsche Bank see red as investors begin to question the bank’s dramatic overhaul, with 18,000 jobs set to go in a €7.4 bn shake-up. On Wall Street, Apple shares sink after Rosenblatt Securities downgrades the stock, citing a ‘fundamental deterioration’ in sales growth at the tech giant. And in Washington, President Trump launches a Twitter attack on the UK’s ambassador to the U.S. and UK Prime Minister Theresa May over leaked diplomatic cables critical of his administration.

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Deutsche Bank announces a radical overhaul, cutting 18,000 jobs and exiting its global equities sales and trading business. The German lender’s CFO James Von Moltke tells CNBC that this round of restructuring will be the last. A strong U.S. jobs report prompts investors to dial back on hopes of a Federal Reserve rate cut. However, the Bank of France governor tells this channel that the ECB may move as early as this month. And we are live in Greece where we hear from newly elected prime minister Kyriakos Mitsotakis whose New Democracy has won a resounding victory ousting Alexis Tsipras and his Syriza party.

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Samsung falls victim to U.S.-China trade tensions, warning second-quarter profits will halve after deliveries to the Chinese smartphone maker Huawei sink. Broader Asian equities stick to two-month highs while global bond yields hold near-record lows ahead of the release of U.S. non-farm payrolls data later today. Relations between Tehran and the West sour further following the seizure of an Iranian tanker suspected of Syrian sanctions violations by British forces off the coast of Gibraltar. And President Trump uses the 4th of July celebrations to highlight America’s military might, with tanks and aircraft featuring in a lavish parade in Washington D.C.

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