Squawk Box Europe Express

A second presidential meeting on the debt ceiling is reportedly postponed until early next week, while reports suggest Treasury Secretary Janet Yellen will sit down with Wall Street bankers in the coming days. Factory inflation continues to ease across the U.S. with producer prices rising at their slowest rate since January 2021, moderating for the tenth straight month. The Bank of England hikes rates to the highest level in almost 15 years and ditches its forecast for a recession this year. We hear from Governor Andrew Bailey. Shares in PacWest plunge after the regional lender reveals an almost 10% drop in deposits in the first week of May. And Elon Musk claims he has found Twitter's new CEO, saying "she will start" in 6 weeks, with reports suggesting a senior NBCUniversal executive will take the reins.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. inflation eases to its lowest level in two years, giving a boost to the Federal Reserve's war against price pressures. The Yuan slides after Chinese inflation also weakens to a two-year low of just 0.1%, with factory deflation deepening. We have the latest from Threadneedle Street, as the Bank of England looks set to hike rates for a twelfth straight meeting. Disney shares fall almost five percent in extended trade as the House of Mouse sees a decline in streaming subscriptions. The debt ceiling deadlock looms large as G-7 finance ministers meet in Japan.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

America’s debt ceiling standoff continues despite congressional leaders holding talks with President Joe Biden at the White House, as he makes a promise to international creditors. Senate and House chiefs pledge to meet again on Friday as Speaker Kevin McCarthy accuses the Biden administration of waiting too long to sit down with the GOP. New York Fed President John Williams doesn’t rule out further rate hikes as he lauds the FOMC’s fight against inflation, ahead of today’s key CPI print. And Ryanair reveals its biggest-ever aircraft order, inking a $40 billion deal to buy up to 300 Boeing planes. Airline boss Michael O’Leary tells CNBC the firms have settled their differences.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

UBS announces Credit Suisse will operate independently under a consolidated banking group, as a management shake-up sees CS CEO Ulrich Koerner join UBS' Executive Board, as well as a change in CFO. Chinese trade data paints a mixed picture for the world’s second largest economy, with imports contracting almost 8 percent, and export growth stalling. California’s financial regulator admits it failed to press Silicon Valley Bank’s bosses for reform before the lender imploded in March, and pledges to do better in future. Concerns over U.S. financial stability persist according to a Fed survey, while a separate report shows lending requirements are set to tighten for the rest of the year. And, President Biden prepares to welcome congressional leaders to the White House in bid to break the debt ceiling deadlock, as Treasury Secretary Janet Yellen warns of “economic catastrophe” – telling CNBC that lawmakers have only one option.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at ht

Berkshire Hathaway CEO Warren Buffett hits out at regulators, politicians and the media for confusing the public on the safety of U.S. banks, despite regional lenders staging a strong rebound on Friday. The Dow jumps more than 500 points as Apple shares surge, with a stronger-than-expected non-farm payrolls report also driving gains. U.S. Treasury Secretary Janet Yellen warns there are “no good options” if Congress fails to raise the debt ceiling, as the Biden administration ramps up the pressure ahead of a June 1st deadline. HSBC shares hit a 2-month high in Hong Kong after the lender successfully rejects a proposal to spin off its Asian business amid pressure from its largest shareholder, Ping An. And, Standard Chartered CEO Bill Winters weighs in on the Fed’s hiking cycle, telling CNBC the market shouldn’t underestimate the resilience of price pressures.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Apple sales decline for the second straight quarter, but shares rise in extended trade as the iPhone maker beats on the top and bottom lines with CEO Tim Cook claiming results were "better than we expected". Wall Street trades in the red for a fourth consecutive session with the Dow turning negative for the year as contagion fears are reignited in the regional banking sector. HSBC bosses prepare for their AGM, amid pressure from the lender's biggest shareholder to restructure and spin off its Asian business. We hear from activist investor Ken Lui. The ECB hikes rates by another 25 basis points with inflation still proving sticky. President Christine Lagarde reiterates the central bank's commitment to fighting price pressures.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The U.S. Federal Reserve hints that it could be nearing the end of the hiking cycle following its tenth consecutive rate rise. However, turmoil remains in the U.S. regional banking system with L.A.-based lender PacWest seeing shares nosedive 52.5 per cent in extended trade. PacWest says it is eyeing strategic asset sales and that deposits have stabilised. On this side of the Atlantic, investors are split over whether the ECB will hike by 25 or 50bps – the central bank’s seventh straight hike. In aviation, Airbus posts slightly lower-than-forecast decline in core earnings with supply chain issues weighing but it insists it will hit production targets. And Qualcomm gives lighter-than-expected sales guidance on weak smartphone demand.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Italian lender Unicredit reports Q1 profit of €2.1bn as revenues grew by 56 per cent. French bank BNP Paribas beats expectations by posting a Q1 income of €2.8bn with CFO Lars Machenil telling CNBC that European banks are robust enough to handle the sector’s recent turmoil. In the U.S., several regional banks lead with losses after JPMorgan’s rescue of First Republic Bank fails to stem the sell-off, pulling Wall Street into the red. German chip giant Infineon launches its new €5bn factory in Dresden benefiting from EU funding. Its CEO Jochen Hanebeck says that Europe must learn to fend for itself against global competitors.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

JPMorgan picks up the remains of First Republic Bank after authorities seize control of the regional lender. It is the second-largest U.S. bank failure in history. JPMorgan CEO Jamie Dimon says his bank answered the government’s call and played down any suggestions of contagion in the sector. HSBC first quarter profits almost triple due to higher rates. The bank also announces its first quarterly dividend in four years. May Day rallies are staged around the world with France seeing up to 800,000 people take to the streets. There are violent scenes in Paris following President Macron’s recent pension reforms. We are live at the WEF Growth Forum in Geneva where the Future of Jobs report has warned that while 69m jobs will be created by 2027, more than 80m could be eliminated.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall Street posts its biggest daily move since January as investors seem to shrug off mixed economic signals with Big Tech earnings leading the way. Amazon posts a Q1 earnings beat but warns of a slowing cloud business, pushing shares lower in extended trade. The BoJ keeps policy stable but has tweaked forward guidance and announces a broad review of monetary policy. In the U.S. beleaguered First Republic Bank is reportedly attempting to prevent a federal seizure, seeking private sector aid following a dramatic share slump earlier this week.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

In the U.S. First Republic Bank scrambles to secure a rescue deal as its share price plunges on collapse fears. Deutsche Bank posts its strongest quarterly profit for a decade. The lender reported pre-tax of earnings of €1.9bn and €12bn of inflows. In tech news, Meta shares are at a 14-month high following its first sales rise in three quarters. CEO Mark Zuckerberg insists investment in AI and the metaverse will continue. And Microsoft is denied its acquisition of Activision Blizzard by the UK competition watchdog.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wall Street is in the red across all three major indices which have suffered their deepest declines this month after First Republic Bank reports more than $100bn of deposit outflows for the first quarter. Standard Chartered beats forecasts with pre-tax profits surging 21 per cent in Q1 on high interest rates and rising trading income. Google parent Alphabet announces a $70bn share buyback and beats forecasts which sends its stock price higher in extended trade. Microsoft follows suit with a beat on estimates thanks to a robust performance from its cloud business. And a potential 2024 U.S. presidential re-match with Donald Trump is on the cards in the U.S. following Joe Biden’s announcement he will run for re-election.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

We are live in Zurich where UBS has posted a 52 per cent drop in net profit for the first quarter. The lender says it does, however, see strong inflows of net new money and highlights its stability ahead of the integration of Credit Suisse. Meanwhile, Santander tops estimates to post a €2.5bn net profit and says it is on track to meet 2023 targets. Deposits at First Republic Bank have fallen by $100bn in Q1, causing the share price plunging. The lender is also set to slash up to 25 per cent of jobs. We hear from Standard Chartered CEO Bill Winters who says that the recent banking crisis is now over. And in luxury news, LVMH becomes the first European company to hit $500bn in market value on the back of a 17 per cent surge in Q1 revenue.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Credit Suisse posts an adjusted pre-tax loss of CHF1.3bn following net Q1 outflows of CHF60bn. The Dow snaps a 4-week winning streak following last week’s U.S. bank earnings with investors bracing themselves for results from the tech sector. Chinese e-commerce giant Alibaba is reportedly set to list its logistics arm in Hong Kong. Several investment banks are interested in under-writing the IPO. And in Germany security workers stage a one-day walk-out over a wage dispute, causing all flights from Berlin to be cancelled.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla appears to hike U.S. prices for its Model S and X cars following yesterday’s share slump by almost 10 per cent as investors scrutinized falling margins. Meanwhile, Mercedes-Benz posts a 15 per cent Q1 return on net sales. Preliminary results also show strong sales and robust pricing. Asian markets are in the red with bond yields coming in lower on the back of several poor U.S. corporate earnings and concerning data reports. We speak to French Trade Minister Olivier Becht who says his country is returning to ‘business as usual’ following the passing of President Macron’s highly unpopular pensions reforms. Demonstrations, however, continue, with rail workers striking and protestors targeting the Euronext exchange in Paris.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Tesla shares are down in extended trade after posting a 24 per cent fall in Q1 net profit. In a conference call, CEO Elon Musk says that following a series of price cuts, he accepts a loss in profits in exchange for growth in sales and market share. U.S. markets are steady following positive results from Morgan Stanley while regional lender Western Alliance shrugs off deposit concerns. This, as the Federal Reserve warns that banks are tightening credit access. We hear exclusively from Israeli PM Benjamin Netanyahu who warns against Chinese involvement in brokering peace in the Middle East. And in retail news, L’Oréal sees sales surge 30 per cent in the first quarter in Europe and North America. However, performance in China is flat since the country’s emergence from strict Covid regulations.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

There are mixed first quarter results for U.S. banks. Goldman Sachs posts a revenue miss while pulling away from its consumer business but BofA beats on higher rates despite CEO Brian Moynihan warning of a recession in the second half of the year. Streaming giant Netflix records a beat on EPS while missing out on revenue after delaying a clampdown on password sharing. Shares have clawed back ground after plunging by 12 per cent in afterhours trade. Atlanta Federal Reserve President Raphael Bostic tells CNBC he believes in a May rate hike and then pause to assess how tightening is affecting the U.S. economy. And in media news, Fox News settles with electoral machine maker Dominion for $788m over its reporting of the 2020 U.S. presidential election.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Chinese GDP grows by 4.5 per cent in the first quarter – faster than expected – following the lifting of strict Covid restrictions back in December. Manufacturing and retail have also show strong signs of rebounding. In the U.S., financial groups Charles Schwab, State Street and M&T witness combined deposit outflows of almost $60bn as investors flee to seek out higher returns. Apple announces it is launching its own higher-yield account. Asian indices are down but Wall Street remains buoyant ahead of further key bank earnings due later today. French President Emmanuel Macron uses a prime time TV address to the nation to defend his controversial pension reforms.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. banking earnings see JP Morgan post record Q1 revenues while Citi and Wells Fargo also beat expectations. In France, President Macron signs his controversial pension reform bill into law after the country’s highest court backed the bill and rejected calls for a referendum. Paris saw further protests over the weekend as a result. ECB policymakers have said that the recent banking turmoil has prompted a re-think about the rate hiking path, but Portuguese central bank governor Mario Centeno and his Finnish counterpart Ollie Rehn have told CNBC that pausing prematurely would be wrong. In pharma news, Merck reports promising test results for its mRNA cancer vaccine, while also sealing its $11 billion merger with biotech firm Prometheus. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. indices record their best performance so far this month as U.S. PPI data comes in softer than expected. IMF managing director Kristalina Georgieva tells CNBC the Fed must persist in its fight to rein in inflation. We also hear from Austrian bank governor Robert Holzmann who says that recent financial instability may require a stronger rate hike response from the ECB. Paris sees further violence following pension reform demonstrations. Dozens of the capital’s transport workers stormed the headquarters of LVMH ahead of a key ruling from the French constitutional council. And in banking news, HSBC has warned that shareholders’ proposals to restructure the bank will significantly hit dividend payouts. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.