Squawk Box Europe Express

Tehran in turmoil…furious anti-government protests spread from the Iranian capital across the country. Demonstrators demand the regime’s leaders step down after they admit Iranian forces mistakenly shot down a Ukraine International Airlines plane last week, killing 176 people on board. Asian stocks soar to 19-month highs as Beijing and Washington prepare to sign their ‘phase one’ trade deal, but weaker-than-expected jobs data and ongoing Middle East tensions caused Wall Street to close in the red last week. And Taiwan re-elects President Tsai-Ing-wen in a landslide victory, sending a strong message to Beijing about its attempts to gain control of the island's democratic government.

An avoidable tragedy…intelligence from the U.S., UK and Canada suggests that the downed Ukraine International Airlines passenger jet was likely hit by an unintentional Iranian missile near Tehran. In Washington, Congress votes to curb President Trump’s ability to take military action against the Islamic Republic in the wake of the killing of General Qasem Soleimani but the resolution will remain non-binding. Wall Street rises, boosted by a new all-time high from Apple shares after Chinese iPhone sales were reported to have grown up to 18 per cent in December. And in Brexit news, the House of Commons finally passes Boris Johnson’s withdrawal bill with a majority of 99 and without any amendments. The bill now passes to the House of Lords to be approved.

Back from the brink? Wall Street and Asian stocks rebound after President Trump claims that Tehran is stepping down from further confrontation with Washington following the killing of General Qasem Soleimani and retaliatory Iranian missile strikes on U.S. targets in Iraq. The news also helps to stabilise oil prices with WTI back in correction territory, as Trump also vows further sanctions on Iran. Former Nissan CEO Carlos Ghosn has made his first public appearance since fleeing bail in Japan, declaring his innocence in the face of financial misconduct charges. He tells CNBC that the charges form part of a conspiracy by Nissan executives to challenge Renault’s control over the alliance. In London, Prime Minister Boris Johnson and Ursula Von Der Leyen lay out their Brexit lines. The European Commission President said that an in-depth trade deal between the UK and the EU is impossible to achieve by the end of the year.

Iran hits back… Tehran launches more than a dozen missiles, targeting U.S. military bases in Iraq, in retaliation for the assassination of General Qasem Soleimani. Asian stocks sell off, while the Dow points lower amid the escalation in the U.S.-Iran crisis. Oil and gold initially surge, but cap gains as President Trump plays down the impact of the latest attacks. In an apparently separate incident in Iran, a Ukrainian Airlines Boeing suffers technical problems and crashes after take-off. According to state media, all 170 passengers on board are believed to be dead. And in Lebanon, the world’s media awaits former Nissan CEO Carlos Ghosn’s first press conference following his surprise escape from house arrest in Japan. His Japanese legal team has accused the auto maker of ‘perversion of truth’ leading to the financial misconduct charges brought against him.

Knock-on effect… Wall Street pushes Asian stocks into the green after the Nasdaq posts its biggest intra-day comeback for three months, with Alphabet hitting a new record high. Geo-political fears keep gold prices at a seven-year high as Iranians hold mass funeral processions for Qasem Soleimani throughout the country. NATO says that a full-blown war between the U.S. and Iran is in nobody’s interest and Washington denies it will be withdrawing U.S. troops from Iraq due to the recent unrest after an internal memo leak. And in auto news, Tesla’s market value reaches $80bn for the first time as the Model 3 saloon car rolls off the production line in Shanghai.

Upping the ante… Iran withdraws from the 2015 nuclear accord and vows to expel the U.S. from the Middle East following the funeral of military commander General Qasem Soleimani, who was killed by an American airstrike last week. The soaring tensions have caused Asian stocks to sink and oil prices to spike as President Trump threatens to hit 52 Iranian sites in case of retaliation, as well as sanction Iraq. In Japan, there are moves to tighten immigration rules as prosecutors break their silence following the escape of former Nissan chairman, Carlos Ghosn, calling his actions ‘illegal and unjustifiable’. Pro-democracy protests in Hong Kong show no signs of abating and have continued near the border with China following the appointment of party-faithful official Luo Huining to run the Hong Kong Liaison Office.

Oil prices soar following Pentagon confirmation that a drone strike has killed Iran’s top military commander in Baghdad. President Trump had ordered the strike following the storming of the U.S. embassy complex in the Iraqi capital which had been approved by General Qassim Soleimani. Iran’s foreign minister has slammed the U.S. action as ‘rogue adventurism’. The rising tensions between Washington and Tehran have impacted gains in Asian stocks and U.S. futures are set to open lower following yesterday’s new record highs. The dollar has slumped against the yen and gold has surged to a nine-month peak as a result of the escalating frictions.    

New Year Records…the S&P 500 has closed 2019 with its best annual gain for six years while Netflix was crowned the index’s top-performing stock, increasing value by 4,000% in the past decade. Beijing cuts its reserve requirement for banks once more, boosting Chinese stocks and offering the economy a $115bn fillip. Hong Kong is once again wracked by violence with anti-government protestors holding their first rallies of the new year. There has also been further violence in Baghdad where U.S. troops have driven back pro-Iranian militia supporters who had stormed the American embassy compound. Also, speculation rises over how ousted Nissan chairman Carlos Ghosn managed a remarkable escape from Japan, where he was awaiting trial for financial misconduct in April.

Gone AWOL…ousted Nissan chairman Carlos Ghosn flees Japan where he has been awaiting trial for financial misconduct. Ghosn has arrived in Beirut saying that he will ‘no longer be held hostage’ by a rigged Japanese legal system. The U.S. market rally finally falters with stocks notching their worst day in a month but Wall Street can boast its best performance in six years overall. In Asia, Chinese stocks haven’t fared much better on the last day of trading this year despite manufacturing numbers beating expectations. Huawei has managed to shrug off the effects of U.S. blacklisting, hitting a record $122bn in revenue. The Chinese tech giant is, however, expecting a tricky 2020 saying that ‘survival’ is its no.1 priority.

Relief rally…Chinese stocks outperform after the S&P 500 posts a fifth consecutive week in the green on the back of optimism surrounding the U.S.-China phase one trade deal. Washington launches airstrikes on Iran-sponsored militias operating in Iraq and Syria following the killing of an American contractor and warns Tehran of further military action. In auto news, Tesla begins deliveries of its Chinese-built Model 3 just one year after construction of the Shanghai Gigafactory began. And Nissan has reportedly called for sweeping spending cuts as a string of executive scandals and partnership tensions with Renault weigh on sales and profit.

A Santa rally: The Dow Jones hits another record high following a stellar performance throughout 2019. Boeing forces out CEO Dennis Muilenberg following the production halt of its problematic 737 Max airliner last week. Board member David Calhoun is now poised to take the reins in January. German car giant BMW announces it is under investigation by the Securities & Exchange Commission over its sales reporting in the U.S. And in energy news, Russian prime minister Dmitry Medvedev shrugs off the threat of U.S. sanctions on the Nord Stream 2 project, promising the Baltic Sea pipeline linking Russia and Germany will be operational within the next few months.

Wall Street looks set to end the decade with a bang. The S&P 500 is up by almost 190% since 2009. Asian stocks see red ahead of Christmas, despite news that China will cut import tariffs on a range of products from January 1st, as both President Trump and Xi Jinping say the Phase One trade deal will be signed soon. In energy news, Berlin and Moscow accuse Washington of interference over U.S. sanctions linked to the Nord Stream 2 pipeline project in the Baltic Sea. And in India, Prime Minister Narendra Modi remains defiant in the face of nationwide protests and violence over controversial new citizenship legislation.

The S&P 500 tops 3,200 for the first time ever as U.S. Treasury Secretary Steven Mnuchin tells CNBC that ‘phase one’ of the trade deal with Beijing will be inked in early January. There'll be a new boss at Threadneedle Street. The FCA's Andrew Bailey is set to take over from Mark Carney as the Bank of England governor from February. We hear exclusively from the new European Union economy chief, Paolo Gentiloni, who tells this channel that monetary policy alone won’t be enough to move the bloc out of the doldrums. And in Washington, President Trump demands a speedy Senate impeachment process but looks to be frustrated by House Speaker Nancy Pelosi who intends to push the GOP to meet Democrat procedural demands.

The U.S. House of Representatives votes along party lines to impeach Donald Trump for abuse of power and obstruction of Congress, making him the third president in history to be charged with the procedure. We analyse rate decisions from Japan and the UK, where central banks are expected to keep policy unchanged, while Sweden’s Riksbank is likely to finally abandon negative rates. The Queen prepares to re-open Parliament following last week’s general election with Brexit and the state of the NHS headlining Prime Minister Johnson’s new government agenda. And in U.S. corporate news, Micron Technology sees shares jump after the chipmaker beat quarterly estimates and hints a recovery is around the corner in 2020.

Flashing red… U.S. shipping and logistics giant Fed Ex sees shares slump after it issues its second profit warning in three months, citing ‘significant challenges’ in 2020. President Trump eyes a new trading partner as trade representative Robert Lighthizer says the U.S. wants to slash its trade deficit with Europe and may hike tariffs on EU goods. In currency news, sterling continues its slide against the dollar after Prime Minister Boris Johnson sets a December 2020 deadline for trade talks with Brussels, raising fresh fears of a cliff-edge Brexit. And, the boards of FCA Group and PSA greenlight a mega-merger which would create the world’s fourth-largest automaker.  

News of a U.S.-China phase one trade deal continues to power a global rally as Wall Street hits fresh records and Asia shares scale 17-month highs. Boeing shares slide after the plane maker halts production of its troubled 737 Max model after U.S. regulators dash hopes of the plane returning to the skies this year. In currency news, sterling stumbles against the dollar on reports that the newly elected Johnson government will block moves to extend the Brexit transition beyond 2020, in a bid to accelerate an EU trade deal. And, following stress tests, the Bank of England gives all seven major UK lenders a clean bill of health, but tweaks the amount of capital lenders must hold in their coffers.   

Phase One Done… the U.S. and China officially agree on the initial stage of the trade agreement. CNBC’s Hadley Gamble is in Doha where she speaks exclusively to U.S. Treasury Secretary Steven Mnuchin who says the deal will be signed early next year. However, the news comes as China reports mixed manufacturing and property data for November, casting doubt over the health of the world’s second-largest economy. Following Friday’s thumping general election victory, UK Prime Minister Boris Johnson says he will be ramping up efforts to get his Brexit deal swiftly approved. And in Washington, President Trump faces a historic House impeachment vote later this week.

“We pulled it off” … UK Prime Minister Boris Johnson hails a Conservative landslide victory – the party’s most significant electoral mandate since 1987. In the markets, sterling jumps by more than two per cent against the dollar on the news. Labour, however, are nursing their wounds after their worst performance at the polls for more than 80 years. Opposition leader Jeremy Corbyn has confirmed he will not stand in another election. In Brussels, EU leaders breathe a sigh of relief at the result, voicing hope it will usher in a new phase in deadlocked Brexit negotiations. CNBC learns that there is also movement in U.S.-China trade talks with a 'phase one' deal agreed in principle. Beijing has reportedly said it will buy $50bn of agricultural goods in return for President Trump suspending further tariffs.

Holding firm… after three cuts this year, the Federal Reserve leaves December’s rate unchanged. Chairman Jerome Powell says he needs to see ‘persistent and significant inflation’ before he'd be prompted to cut again any time soon. The focus shifts across the pond, with all eyes on new ECB president Christine Lagarde’s first policy decision later today. And President Trump is set to meet with his key trade officials to discuss fresh tariffs on China as Sunday’s deadline looms.

The countdown is on! Investors eagerly await Saudi Aramco's mega IPO with shares set to start trading on the Tadawul, in the world's biggest listing ever. We are live with reaction from Riyadh, as the oil giant makes its debut at 32 riyals a share, valuing the company at $1.7tn. It’s a mixed picture for U.S. and Chinese stocks with the threat of fresh tariffs on Beijing just around the corner but the markets are now focused on the Federal Reserve’s rate decision due out later today. Swiss bank Credit Suisse cuts its profitability targets for this year and next, as it faces shareholders in its investor day, amid pressure from negative interest rates. With a day to go before the UK general election, sterling slides against the dollar after a new poll hints at a hung parliament. In Washington, Democrats formally publish two impeachment articles against President Trump, who becomes the fourth U.S. leader in history subject to such charges.