Squawk Box Europe Express

The Dow records its longest winning streak since 2017 but the Nasdaq slumps to its worst day in 4 months. German software giant SAP misses Q2 expectations and slashes revenue guidance for its cloud unit but CEO Christian Klein tells CNBC that cloud remains its key growth driver despite waning demand. Indian IT firm, Infosys, sees shares tumble after it cuts its outlook in half due to inflation pressures and a pullback in discretionary spending. The Conservatives win a by-election in Boris Johnson’s former constituency but lose a seat to Labour in what was the largest swing for the party since 1997. And we are live in Madrid where Spanish Prime Minister Pedro Sanchez’s snap election gamble comes to a head this Sunday.   

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Tesla shares dive in extended trade after price war pressures hit Q2 margins. However, CEO Elon Musk shrugs off recession fears to forecast stellar growth for the EV maker. Netflix sees subscriptions beat estimates in Q2 following a crackdown on password-sharing. However, a miss on guidance sends shares lower in after-hours trade. Goldman Sachs endures a bruising Q2 posting its lowest quarterly profit in 3 years as deal-making slumps.

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Higher net interest in the U.S. helps Bank of America and Morgan Stanley to record bumper quarterly profits. BofA CEO Brian Moynihan tells our colleagues Stateside that a soft landing is now very much a possibility. The strong bank earnings on Wall Street see the Dow posting its longest winning streak in more than two years. Microsoft reveals pricing for its new A.I. subscription sending shares rocketing to a new all-time high. The firm’s Activision Blizzard deal extension talks now go down to the wire. The UK could see further hot inflation data coming through later on, as continuing price pressures mean the Bank of England is likely to maintain tightening.

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Wall Street’s top banks slash FY Chinese GDP with both Hong Kong and mainland shares underperforming and the property sector shedding value. U.S. equities are in the green at the start of a busy week of earnings, with major banks’ earnings in the spotlight. Microsoft’s deal for Activision Blizzard is closer to completion after Berkshire Hathaway reveals it has offloaded 70 per cent of its stock in the game maker. Russia crashes the Ukraine grain deal blaming the West for not upholding its side of the bargain. Ukrainian President Volodomyr Zelenskyy slams the move, saying extortion will not be tolerated. And in retail news, the board of beleaguered French supermarket Casino approves rescue talks with Czech billionaire Daniel Kretinsky.  

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The Chinese economy continues to stutter, only growing by 0.8 per cent in Q2, raising expectations of vital stimulus efforts from Beijing. Asian equities respond in kind slipping on the news, however Wall Street and European markets enjoy their best week since March. Microsoft and Sony agree to a 10-year deal to keep the best-selling ‘Call of Duty’ game on the PlayStation console. The move brings Microsoft a step closer to sealing the Activision Blizzard deal. And U.S. banks kick off earnings season posting bumper profits via rising net interest rises. Citi CFO Mark Mason tells CNBC it is still too early to rule out a recession.  

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Wall Street posts its fourth-straight day in the green while Asian equities are on track for the best week of the year after U.S. producer prices come in muted for June. However, San Francisco Fed President Mary Daly tells CNBC the fight against inflation is not over yet. Earnings season is set to kick off in the U.S. with the larger banks are braced for a surge in loan losses as high rates affect borrowers. In crypto news, a U.S. judge rules that a Ripple token does not represent a security which offers a potential supervisory escape route for other altcoins. The FTC’s Chair Lina Khan is grilled on Capitol Hill as the regulatory body fails in another attempt to block Microsoft’s $69bn takeover of Activision Blizzard.   

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The S&P 500 and the Nasdaq close Wednesday’s session at a 15-month high after U.S. inflation drops to its lowest level in two years. Chinese exports suffer their worst decline since February 2020. We are live in Vilnius where following a difficult and testy NATO summit, G-7 countries provide Ukraine with long-term security guarantees but President Volodomyr Zelenskyy tells CNBC that full NATO membership is his ultimate goal. German industrial giant BASF surprises by slashing FY guidance as weakening industrial demand weighs. And in tech news, the U.S. FTC appeals the court ruling which green-lit Microsoft’s $69bn of game maker Activision Blizzard.

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We are live in Vilnius, Lithuania where NATO members stop short of an outright invitation to Ukraine to join the alliance. German defence minister Boris Pistorius tells CNBC that Kyiv will have to wait until the conflict ends to become a fully-fledged member. Speaking ahead of important bilateral meetings, Ukrainian president Volodomyr Zelenskyy slammed the delay as ‘absurd’. In tech news, Activision shares surge after a U.S. judge green-lights Microsoft’s bid to buy the game maker. UK authorities have now indicated they may welcome the deal. U.S. equities close in the green with the S&P 500 and the Nasdaq within 1 per cent of their 52-week highs.

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Turkey clears the path for Sweden’s NATO accession with Ukraine’s membership bid now the focus of attention at the bloc’s summit in Vilnius. Lithuanian President Gitanas Nausėda tells CNBC full integration for Kyiv is paramount. U.S. equities break a three-day losing streak with financial and energy stocks balancing out tech losses ahead of key inflation reports and the beginning of quarterly earnings. UK Chancellor Jeremy Hunt calls for wage restraint in a bid to rein in inflation. BoE governor Andrew Bailey says salary increases are contributing to price pressures.  

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U.S. Treasury Secretary Janet Yellen hails a constructive trip to China after holding 10 hours of talks with senior officials, as the U.S. considers curbs on investment. Chinese producer prices fall at their fastest pace in over 7 years while CPI comes in on the brink of deflation, underscoring the challenges facing the world's second largest economy. U.S. President Joe Biden says Ukraine is not yet ready for NATO membership, acknowledging divisions within the defence alliance as Kyiv marks 500 days of war ahead of a key summit in Lithuania. Headline U.S. non-farm payrolls come in below forecasts, but strong wage growth fuels concerns of further rate hikes from the Fed - sending the Dow to its worst weekly performance since March. ECB governing council member Francois Villeroy de Galhau pushes back against suggestions central banks should raise their 2% inflation targets, while Eurogroup President Paschal Donohoe tells CNBC there's more work to do.

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