Squawk Box Europe Express

Wall Street is on course to post an eight-week winning street with the Dow hitting a new closing high and the S&P 500 not far off its own record peak. The NYT sues Microsoft and OpenAI in a billion-dollar suit over copyright infringement. Apple wins a major legal victory after a U.S. appeals court rules to pause a government import ban on two of its watches. The tech giant had been in an intellectual property dispute with medtech firm Masimo. And in the UK, the government has confirmed the spring Budget will happen on March 6th.

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The Wall Street Santa rally extends its eight-week winning streak with bets on a March Fed rate cut boosting stocks. In China, November industrial profits are up by almost 30 per cent for November thanks to a variety of government stimulus measures. However, the numbers are still behind 2022 for the year at this point. In Hong Kong, gaming stocks lead the way as Beijing regulators confirmed they would re-consider draft rules aimed at curbing online play and spending. Oil spikes following a Houthi attack on an MSC United vessel in the Red Sea. The company is now re-routing shipments around southern Africa.  

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The U.S. Santa rally is back on but European indices fail to follow suit with UK GDP receiving a downward revision signalling a potential recession next year. Sportswear giants in Europe see declines in early trade following Nike’s revenue forecast cut. The brand has unveiled a $2bn cost-cutting initiative which has knocked 10 per cent from its U.S. share price. Chinese authorities issue new spending and time rewards for online gaming, pulling Hong Kong’s Hang Seng index into the red. U.S. President Joe Biden has joined other American lawmakers in demanding closer scrutiny of Nippon Steel’s proposed $15bn takeover of iconic U.S. Steel.

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The Wall Street Santa rally hits a wall with the Dow and the Nasdaq breaking a nine-day winning streak. The S&P 500 records its worst session since September. In media news, CNBC sources claim Warner Bros./Discovery and Paramount have launched merger talks in what could be a landmark mega-deal to gain market share in the streaming industry. Toyota sees shares nose-dive following a major U.S. recall due to a suspected airbag sensor fault. And we hear from French sports minister Amélie Oudéa-Castéra who says next summer’s Paris Olympics could generate up to €10bn and create 180,000 jobs as the city puts the finishing touches to the world’s biggest sporting event.

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The Santa Rally accelerates with the S&P 500 nearing a new record high and Dow soaring more than 200 points in what was its ninth consecutive session in the green. The U.S. and its allies consider airstrikes against Houthi forces as part of Operation Prosperity Guardian to protect merchant vessels in the Red Sea. Maersk CEO Vincent Clerc tells our colleagues Stateside the security of his crews is paramount. In Europe, new car registrations pick up almost 7 per cent in November with French and Italian data offsetting a slump in Germany. And in logistics news, weak demand prompts Fedex to slash its FY guidance, causing the share price to tumble.   

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In Asia, equities are in the green with the Nikkei leading the way at the close but the Japanese yen dips as the BoJ is to maintain its ultra-loose monetary policy with no hint of when it will end its negative rate strategy. The Dow and the Nasdaq close narrowly up for the eighth straight session following more dovish predictions about 2024 rate cuts. Chicago Fed President Austan Goolsbee says he is perplexed by market reactions. In the Red Sea, the U.S. spearheads an international maritime operation to protect merchant shipping lanes from drone and missile attacks by Iranian proxies. BP has announced it will be rerouting its tankers in the region. In banking news, activist investor Cevian reveals a €1.2bn stake in Swiss lender UBS following its rescue of Credit Suisse in March. And Apple is scrambling to resolve an IP dispute with a medical technology firm which is holding up U.S. sales of its watches, less than a week before Christmas.   

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It’s a seventh consecutive week in the green for Wall Street as rate cut optimism continues to grow. However, New York Fed President John Williams tells CNBC that markets should not be too hasty. Shipping titans MSC, Maersk and Hapag-Lloyd say they will stop travelling through the Suez Canal following a spate of attacks on cargo ships in the Red Sea. Germany, France and the UK have called for a ceasefire in Gaza after three Israeli hostages were killed over the weekend. Chinese AI firm SenseTime shares hit a record low following reports its founder has been found dead.  

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We are live in Brussels where EU leaders have failed to agree on renewed aid to Ukraine following stiff opposition from Hungary. However, the bloc has confirmed accession talks with Kyiv are to go ahead. Wall Street and European indices remain in the green but lose some momentum following this week’s Fed rate decision. Asian markets, however, push higher led by the Hang Seng. In China, manufacturing output surges in November but the retail sales disappoint. European central banks remain hawkish, rejecting market hopes of a New Year pivot towards rates cuts.

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The U.S. Federal Reserve indicates that it will cut interest rates by 75bps next year, triggering a Wall Street rally where the Dow closed above the 37,000-point mark for the first time ever. Resultantly, the 10-year Treasury yield sinks below 4 per cent for the first time in 4 months. Doubleline Capital CEO Jeffery Gundlach tells our colleagues Stateside to brace for market volatility next year. There are rate decisions due from the SNB, ECB, BoE and Norges Bank later today as Deutsche Bank board member Alex von zur Muhlen telling CNBC that central bank moves are finally working. We are also live in Brussels where EU leaders are meeting to discuss Ukraine funding and accession amid opposition from Budapest.  

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Cop28 negotiators publish a new draft communique which omits any mention of phasing out fossil fuel but have tightened some of the text regarding use of hydrocarbons. The S&P 500 hits its highest level in nearly 2 years. U.S. headline inflation decelerates which has raised investors’ hopes the Fed will pause rate cuts today. Ukrainian President Volodomyr Zelenskyy is in Washington D.C. setting out his case for more U.S. war aid while the country’s deputy prime minister, Olga Stefansishyna tells CNBC she is expecting progress on Kyiv’s bid to join the European Union. And in retail news Walgreens is reportedly looking to spin off its UK Boots franchise with a potential London IPO being under discussion.

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