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Speaker 1: For our third quarter earning season in the US is

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Speaker 1: kicked off with a hesten a rural plenty of volatility,

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Speaker 1: and there's Stephanie Bachelor from Milford Acid Management is with US.

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Speaker 1: Ay stepf hi he that okay, what's going on in

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Speaker 1: the luxury good space because there was a lot of

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Speaker 1: excitement after the China stimulus announcements, but that's now faded

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Speaker 1: and it's been overshadowed by pretty weak earnings. Yeah.

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Speaker 2: Yeah, so that's right. The one of the key areas

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Speaker 2: of weakness for luxury goods companies over the last year

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Speaker 2: has been China because that's historically been a very important

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Speaker 2: part of the world for them, and of course they've

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Speaker 2: got a week housing market, very poor consumer sentiment, and

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Speaker 2: so the Chinese consumer hasn't been traveling or spending as

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Speaker 2: much as they would historically. If we look at Louis

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Speaker 2: Vuitton Mouett Tennessee or LVMH, it's the largest luxury goods

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Speaker 2: company in the world, and it's sort of considered a

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Speaker 2: bell weather for the space. Its share price was down

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Speaker 2: about thirty percent between March and September, but when the

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Speaker 2: China stimulus was announced, the market got really excited. Thinking

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Speaker 2: that Chinese demand would be reignited, and shares actually moved

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Speaker 2: up twenty percent in just one week. Following that move,

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Speaker 2: the stock faded again because questions have started to arise

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Speaker 2: around you know how long it would take for the

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Speaker 2: stimulus to boost demand and by how much, because it's

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Speaker 2: likely more targeted at a lower income consumer, which isn't

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Speaker 2: the typical luxury goods customer. And then you mentioned earnings, So, yeah,

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Speaker 2: it was a pretty poor set of numbers. It's key division,

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Speaker 2: Fashion and leather Goods, had revenue four five percent in

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Speaker 2: the quarter, and that was the first quarterly decline since

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Speaker 2: two thousand and nine if you exclude COVID. So shares

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Speaker 2: fell four percent, and it dragged a bunch of other

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Speaker 2: luxury names down on the day two.

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Speaker 1: Yeah, and then what about the semiconductors, because it sounds

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Speaker 1: like there's been some winners and losers there as well.

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Speaker 2: Yeah, so that's been an interesting space last week. ASML Now,

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Speaker 2: this is a company that provides equipment to the big

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Speaker 2: semiconductor manufacturers. They released their results and showed a myths

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Speaker 2: on orders as well as a reduction to their twenty

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Speaker 2: twenty five expectations. So shares were down to fifteen percent

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Speaker 2: on the day, and it caused a bit of concern

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Speaker 2: that this AI boom might be starting to fizzle out.

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Speaker 2: But it does seem as though the weakness might might

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Speaker 2: have been just sort of specific customers or company factors,

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Speaker 2: because just a few days later, TSMC, which is one

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Speaker 2: of ASML's customers and is the largest semiconductor manufacturer in

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Speaker 2: the world, they reported a record third quarter. So it

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Speaker 2: indicated that, you know, the AI boom is still alive

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Speaker 2: and well. And so TSMC shares rallied ten percent on

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Speaker 2: the day.

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Speaker 1: Yeah, any bright spots in the evening season so far

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Speaker 1: for you, Yeah.

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Speaker 2: So TSMC is one. But also the big US banks

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Speaker 2: reported very strong results. They're seeing some green shoots come

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Speaker 2: through for capital markets. If you look at Morgan Stanley,

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Speaker 2: they said, you know, we're in the early stages of

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Speaker 2: the multi year capital markets recovery, and so corporates are

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Speaker 2: getting more comfortable thinking about mergers and acquisitions or raising equity,

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Speaker 2: all of which drives those big banks investment banking fees.

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Speaker 2: And another stockworth mentioning is Netflix, so which you know,

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Speaker 2: their shares were up eleven percent after it reported its

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Speaker 2: most profitable quarter Ever, and despite subscriber growth actually slowing,

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Speaker 2: Netflix still has very attractive opportunities to boost profits through

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Speaker 2: either its new ad supported membership model or price increase.

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Speaker 1: It's fascinating, Stuf Steff. Thank you for runn us through

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Speaker 1: its Stephanie Bachelor Milford Asset Management.

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Speaker 2: For more from Heather Duplessy Allen Drive. Listen live to

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Speaker 2: news talks.

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