Squawk Box Europe Express

Wall Street is poised as investors anticipate the Fed’s next move ahead of today’s U.S. inflation print. In the UK, a shock return for former prime minister David Cameron who has been drafted in as foreign secretary in a contentious reshuffle by Rishi Sunak. Shares in troubled engineering giant Siemens Energy move higher on news of a state aid guarantee as soon as tomorrow. And in Brussels, officials agree a 12th package of sanctions against Russia. The bloc’s sanction envoy David O’Sullivan tells CNBC that punitive financial efforts are slowly taking effect on the country’s economy.  

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Moody’s lowers its US outlook but maintains its AAA rating amid looming political turmoil as new House Speaker Mike Johnson works to avert a government shutdown. Asian equities search for direction and U.S. futures are in the red after the Nasdaq posts its best daily performance since May. Danish pharma giant Novo Nordisk publishes positive results from its cardiovascular trials as its attempts to lengthen the gap over rival Eli Lilly. U.S. Treasury Secretary Janet Yellen has met with Chinese Vice Premier He Lifeng ahead of this week’s meeting between President Biden and Xi Jinping in San Francisco in a bid to smooth economic tensions.  

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U.S. Federal Reserve Chairman Jerome Powell remains hawkish about the prospect of further rate cuts and has warned of being complacent following several months of positive data Stateside. His comments, along with a poor 30-year bond auction broke the Wall Street rally and pushed Treasury yields higher. In Spain, the PSOE strikes an amnesty deal with Catalan separatists, paving the way for Pedro Sanchez to return as prime minister. The move has infuriated the opposition Partido Popular. Siemens Energy stock is up by 6 per cent following reports of a breakthrough in talks to guarantee state funding to prop up the company’s €100bn order book. In crypto news, Bitcoin hits a 18-month high and Ether breaches the key $2,000-level on the news that BlackRock is moving to a spot ETF. We hear from Ripple CEO Brad Garlinghouse who says that a new form of regulation is required.

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China’s economy falls back to consumer price deflation territory with factory gate prices decreasing for the 13th consecutive month. Disney posts a Q3 bottom-line beat and cuts costs by a further $2bn. Boasting subscriber numbers of 150m, CEO Bob Iger tells CNBC that the business is now on its way to recovery. Chip maker ARM sees shares fall by almost 7 per cent in extended trade, posting weaker-than-expected guidance in its first results since going public. In aviation news, French plane maker Airbus posts 9-month revenue of €42bn and hikes its targets for the production of its A350 craft. We also assess last night’s third GOP presidential debate in Miami which focused on abortion rights, foreign policy and the absence of frontrunning candidate Donald Trump.

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Wall Street notches its eighth consecutive session in the green – the longest winning streak in two years. Fed Governor Michelle Bowman is pushing for a further hike as her colleague Christopher Waller calls recent GDP data as a ‘blowout quarter’. Chicago Fed President Austan Goolsbee tells our colleagues Stateside that a ‘golden path’ to a soft landing remains a possibility. Crude slips to three-month lows as several poor global data prints and the potential of spillover from the Israel-Gaza war fuel concerns of slowing demand. The IMF calls for tight European policy decisions but the Fund’s Europe Director Helge Berger tells CNBC that the continent will dodge a recession. Plus, we have a slew of third-quarter earnings with DHL, Pandora and Siemens Healthineers among them.  

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UBS posts a higher-than-expected Q3 loss, however the incorporated Credit Suisse wealth management unit enjoys net new money turning positive for the first time in 18 months. The Nasdaq finishes in the green for a seventh consecutive session but Asian equities fail to follow suit. Chinese trade data is out for October with exports falling for a sixth straight month but imports beat forecasts to grow by 3 per cent. In Australia, the RBA hikes interest rates by 25bps, reaching a 12-year high. And in corporate news, WeWork seeks Chapter 11 bankruptcy. The Softbank-backed office-sharing start-up reports liabilities ranging from $10bn to $50bn.  

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Wall Street enjoys its best week of the year and the Nikkei responds by hitting a one-month high. The risk-on sentiment was fuelled by a softer-than-expected U.S. jobs data but Richmond Fed President Thomas Barkin tells CNBC that there are still no rate cuts to come in the near-future. Berkshire Hathaway posts a 40 per cent jump in operating earnings as Warren Buffett buys up short-term Treasury bills. The company’s cash pile balloons to a record $157bn. In telco news, Telecom Italia’s board approved KKR’s €19bn bid for its fixed-line network. However, top shareholder Vivendi vows to block the deal using any legal means possible.

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Sam Bankman-Fried is found guilty on all seven counts of criminal fraud, conspiracy and money laundering. The FTX founder now faces more than 100 years behind bars. A disappointing forecast for Christmas retail weighs on Apple in extended trade even as the company posts a beat on Q4 earnings. All three U.S. majors are on track for their strongest week of the year with non-farm payroll numbers due after the S&P 500 reporting its best session since April. French lender Société Générale enjoys a Q3 net profit beat thanks to a resilient performance from its investment arm as its new CEO plans to overhaul the bank. And Bank of England governor Andrew Bailey tells CNBC that the latest rate pause signals the end of the hiking cycle but says that talks of any cuts remain premature.

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The U.S. Federal Reserve keeps rates on hold claiming progress in the fight against inflation but Chairman Jerome Powell does not rule out further hikes as the U.S. economy remains robust. Investors, however, bet that the Fed is finished in its hiking cycle, pushing Wall Street into the green and U.S. yields drop with the Treasury decreasing the pace of longer-dated bond issuance. But investors Stanley Druckenmiller and Jeffrey Gundlach tell CNBC that they fear oncoming challenges. The BoE rate decision is due later today. And we are live in Bletchley Park, Buckinghamshire at the A.I. Safety Summit where the U.S. has unveiled its own watchdog to regulate the new technology. The UK’s Science, Innovation & Technology Minister Michelle Donelan tells CNBC that it is paramount to have the ‘right guardrails’ in place today. 

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Wall Street ends a tough October in the green as investors bank on another Federal Reserve rate pause. The U.S. Treasury is due to announce its quarterly refunding process with the 10-year yield hitting a 16-year high. The private Caixin survey shows Chinese manufacturing slip into contraction territory in October, further highlighting the challenges facing Beijing’s stimulus programme. Corporate tech leaders and world policy makers meet in the UK for the inaugural A.I. Safety Summit. We hear from the CEO of Google DeepMind who says governments must coordinate to create a safe framework for the technology.

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