Squawk Box Europe Express

Asia equities are at a 10-month low as the new quarter begins while in the U.S. the Russell 2K turns negative for the year. Crude prices also remain negative, touching on a 3-week low. We are live at ADIPEC in Abu Dhabi where the CEOs of some of the world’s largest IOCs talk to us about the difficulty of maintaining price security while also keeping the pace of the energy transition. Trading in Chinese property developer Evergrande resumes following a two-day hiatus as police launch an official investigation into the firm’s billionaire founder. In autos news, Tesla fails to hit its delivery target – its first decline in more than a year – as high rates and factory upgrades weigh in the third quarter. And German sandal-maker Birkenstock is due to list in New York next week with an IPO valued at more than $9bn.

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The U.S. government narrowly avoids a shutdown after both the House and Senate agree on a short-term funding deal. President Biden has blamed ‘MAGA extremists’ for the brinkmanship. In oil news, crude prices end Q3 almost 30 per cent higher as Saudi Arabia and Russia are set to keep supplies tight until the end of the year. We are live at the ADIPEC summit in Abu Dhabi where we will be speaking to whole hosts of guests from the energy sector. A key U.S. inflation barometer posts its smallest increase in three years which has boosted hopes that the Fed could be close to ending its rate-hiking cycle. The S&P 500 ends September at its worst monthly level this year while Chinese factory activity expands for the first time in six months.

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U.S. equities plunge in September as Fed rate concerns prompt a global sell-off. Speaking at CNBC’s Delivering Alpha conference, billionaire hedge fund manager Bill Ackman says he would not be surprised to see Treasury yields hit 5 per cent and beyond. We also hear from Altimeter Capital chairman and CEO Brad Gerstner who predicts that A.I. may even have a bigger impact than the internet in the 1990s. The U.S. House of Representatives passes a defence funding bill which removes support for Ukraine while the Senate scrambles to agree on short-term budgetary plans before a potential government shutdown on Sunday. House Speaker Kevin McCarthy tells CNBC that there is still time to avert the crisis. In autos news, UAW members warn they will expand strikes if their demands are not met as they table a counter-proposal to Stellantis. And failed lender Credit Suisse reports an adjusted loss of CHF3.5bn with net outflows totalling almost CHF40bn.

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Soaring yields pushes U.S. stocks to their worst month of the year so far. The 10-year Treasury yield hovers at its highest level since 2007. However, Bank of America CEO Brian Moynihan tells our colleagues Stateside that a soft landing is still possible. SEC Chair Gary Gensler has warned that Congress’s inability to secure a budget deal could have serious repercussions for stock and bond markets. Presidential hopeful Nikki Haley slams lawmakers for risking a government shutdown as GOP candidates trade barbs during the second Republican debate hosted by Fox Business. Germany awaits what could be its largest IPO this year as Schott Pharma prepares to list with a potential valuation of €4.1bn.

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The Dow plunges by almost 400 points to post its worst session since March. The U.S. 10-year Treasury hovers at its highest level since 2007. The U.S. competition watchdog, the FTC, launches an unprecedented probe into e-commerce giant Amazon, accusing it of inflating prices, hobbling competition and exploiting vendors. In Washington, a government shutdown looms as a bipartisan funding bill is put forward in the Senate but some Republicans continue to push a conflicting measure in the House of Representatives. President Joe Biden becomes the first leader to join a picket line, offering support to striking UAW members in Michigan.

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Wall Street breaks a four-day losing streak, this despite the U.S. Treasury yield breaching a high from 2007. We hear from Chicago Fed President Austan Goolsbee who says the central bank is on the right track to reining in inflation. Ratings agency Moody’s says that another U.S. government shutdown could risk its AAA sovereign rating as federal funding discussions continue to drag on. Chinese property giant Evergrande sees losses extend for a second day after one unit misses an on-shore bond interest payment. Brussels and Beijing attempt to diffuse trade tensions. EU Trade Commissioner Valdis Dombrovskis urges the two not to drift apart. In autos news, we hear from Nissan CEO Makoto Uchida who pledges his company will only sell EVs by 2030 and hails its foothold in the Chinese market.

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On Wall Street the S&P 500 and the Nasdaq suffer their worst week since March as a trio of Fed officials doubled down on ‘higher for longer’ rate hike cycle signals. Chinese property giant Evergrande sees shares plunge after it announced it was unable to issue new debt due to an investigation into one of its subsidiaries. There has been a breakthrough in Hollywood between the writers’ union and the major studios but in Detroit strikes have expanded with President Joe Biden set to join the picket lines tomorrow. European Trade Commissioner Valdis Dombrovskis has said that China could do more to improve Europe’s perception of risk from the country but stresses that Brussels does not seek to decouple from Beijing. And in Spain, 40,000 people protest against plans by Prime Minister Pedro Sanchez to grant Catalan separatists amnesty.

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Wall Street is having its worst week since March posting a third consecutive day in the red with the 10-year Treasury yield stalled at levels not seen since 2007. The BoJ maintains its ultra-low interest rate causing the yen to fall. This as inflation data comes in above target for the 17th month in a row. Sterling also plunges to a six-month low after the Bank of England governor Andrew Bailey casts the tie-breaking vote to hold rates steady following 14 consecutive increases. In autos news, talks remain stalled between Detroit’s Big Three and UAW bosses ahead of a deadline later today. More sporadic strikes have been promised unless an agreement is found. And News Corp and Fox Corp chairman Rupert Murdoch steps down from the helm to pass the reins on to son Lachlan. He will remain as chairman emeritus of the media empire.  

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The U.S. Federal Reserve has paused its rate-hiking cycle, predicting one more hike later this year and fewer cuts than expected next year. Fed Chair Jerome Powell’s hawkish forecast pushes Treasuries to new multi-year records while U.S. equities close in the red. We hear from Klaviyo CEO Andrew Bialecki who hailed the timing of his company’s IPO. Shares were up 9 per cent on the debut. And in the UK, investors are braced for the Bank of England’s rate decision which could follow the U.S. in pausing rate hikes following yesterday’s better-than-expected inflation data.  

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The U.S. 10-year Treasury yield hits its highest level since 2007, putting pressure on stocks around the world ahead of today’s Fed rate decision. Rising rates across the world have pushed debt to a fresh record high of more than $300tn. Online grocery delivery firm Instacart debuts on the Nasdaq with shares closing up 12 per cent. CEO Fidji Simo tells our colleagues Stateside that post-pandemic growth is paramount. Ark Invest launches on the European ETF market snapping up specialist thematic group Rize. We hear from European Commission Vice-President Maroš Šefčovič who says the bloc seeks a balanced trading relationship with Beijing and has denied plans for tariffs on Chinese electric cars in the future.

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