WEBVTT - ASML Down, Burberry Falls, Volvo Car Plunges

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<v Speaker 1>Bloomberg Audio Studios podcasts, radio news, The.

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<v Speaker 2>Stock Movers podcast, your roundup of companies making moves in

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<v Speaker 2>the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Let's get into some of the stocks on me today.

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<v Speaker 3>Let's look at some of the stocks moving in Europe.

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<v Speaker 3>I on Caroline Hepcat with Stephen Kowen. We're joined by

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<v Speaker 3>Bloomberg reporter cloimb Lay. Good morning, Good morning. Let's start

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<v Speaker 3>with ASML. We've had this major semi and AI related

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<v Speaker 3>route in Asia. What is the reader cross into Europe.

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<v Speaker 1>Yeah, so we are seeing a SML shares down quite

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<v Speaker 1>a bit this morning. This is a very interesting reversal

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<v Speaker 1>from yesterday when ASMA had actually a really good day

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<v Speaker 1>thanks to those very good numbers from TSMC, which of

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<v Speaker 1>course was seen as a positive reader cross because ASML

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<v Speaker 1>is a key supplier to TSMC. But today ASML, just

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<v Speaker 1>like the rest of that chip sector in Europe, has

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<v Speaker 1>been swept up in that broad tech sell off which

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<v Speaker 1>started in Asia. There was really this kind of incredible

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<v Speaker 1>rally throughout the beginning of this year in this AI

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<v Speaker 1>chip stocks because of this enthusiasm around the AI trade.

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<v Speaker 1>But now we've reached a point where valuations are so

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<v Speaker 1>high that investors are getting a bit concerned, and the

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<v Speaker 1>big question is really over whether the billions and billions

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<v Speaker 1>of dollars that have been poured into this AI infrastructure

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<v Speaker 1>can actually deliver returns and actually sustain that chip demand.

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<v Speaker 1>And so we're seeing a lot of weakness across that

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<v Speaker 1>sector this morning, ASML down about four percent this morning.

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<v Speaker 1>But then the rest of that sector like b Semi Infinian,

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<v Speaker 1>all of those big chip names in Europe have also

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<v Speaker 1>seen that huge job including as well some of the

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<v Speaker 1>names that are more in the AI infrastructure equipment side

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<v Speaker 1>of things, so names like Siemens or Schneider Electric also

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<v Speaker 1>swept up in that. So we're seeing, as you mentioned Carolina,

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<v Speaker 1>a huge route in that chip sector for sure. Okay,

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<v Speaker 1>let's put down our computers for a moment and pick

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<v Speaker 1>up some fashion because we're going to turn into burbery.

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<v Speaker 2>Sales growth, but shares are down, yeah.

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<v Speaker 1>So it's quite interesting for Berber. We had sales growth

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<v Speaker 1>across all the ranges for the first time in three years,

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<v Speaker 1>so on the face of it, that sounds quite positive.

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<v Speaker 1>You know, there was very strong demand in the US

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<v Speaker 1>in particular, so that it kind of confirms that this

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<v Speaker 1>ongoing turnaround for the company is working quite well and

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<v Speaker 1>actually starting to really pay off. And this also echoes

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<v Speaker 1>what we heard from Richmore earlier this week about this

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<v Speaker 1>a very strong US market with wealthy Americans buying a

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<v Speaker 1>lot of Carti jewelry and apparently a lot of those

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<v Speaker 1>Barbary trench coats as well. But as you said, the

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<v Speaker 1>chees did dip this morning, and that is perhaps because

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<v Speaker 1>of the fact that the sales growth came in line

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<v Speaker 1>and not above expectations, so maybe a slight disappointment there.

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<v Speaker 1>And also Barbary did have quite a cautious outlook, and

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<v Speaker 1>you know it flagged uncertainty related to this geopolitical situation,

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<v Speaker 1>these geopolitical risks, all those sales are increasing for some

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<v Speaker 1>of those luxury names, especially in the really key markets

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<v Speaker 1>like China. In the US, the whole industry is still

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<v Speaker 1>very much facing that weakness in consumer confidence because of

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<v Speaker 1>the Iran War, which is obviously still very much continuing.

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<v Speaker 1>So perhaps some of that cautious outlook is feeding through

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<v Speaker 1>into those shares this morning. Waters have to see what

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<v Speaker 1>LVMH and Caring say and they'll give us a better

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<v Speaker 1>clearer picture of what's going on with luxury.

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<v Speaker 3>Yeah, okay, that's really interesting and a lot dependent on

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<v Speaker 3>Asia and on younger buyers and all on all the

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<v Speaker 3>different regions. Let's think about Volvo Cars. Their share price

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<v Speaker 3>down the most since February.

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<v Speaker 1>Why, yeah, So this is on the back of some earning.

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<v Speaker 1>So there's really further sign of weakness in that car

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<v Speaker 1>making industry coming from Volvo Car this morning. So they

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<v Speaker 1>said there had been a considerable weakening over the second

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<v Speaker 1>quarter in the Chinese market and as a result of that,

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<v Speaker 1>the company scraped its sales growth target for the year.

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<v Speaker 1>The CEO said that the market was pretty bleak and

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<v Speaker 1>really mentioned China as this particular spot of weakness. Of course,

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<v Speaker 1>the broader mark car making sector is in quite a

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<v Speaker 1>lot of trouble at the moment. There's those really high

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<v Speaker 1>materials costs, there's this intensifying competition from the Chinese manufacturers,

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<v Speaker 1>and then also there's quite a low demand in Europe

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<v Speaker 1>and the US, and so we have heard from other companies.

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<v Speaker 1>We had a profit warning from BMW a few weeks ago.

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<v Speaker 1>We have the restructuring plan from Volkswagen as well, with

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<v Speaker 1>the company planning to cut some jobs, close some factories

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<v Speaker 1>rethink its model lineup as well. In so today Volvocar

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<v Speaker 1>came out with those disappointing earnings, but it's very much

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<v Speaker 1>within that same vein of weakness across that car making industry,

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<v Speaker 1>and as are expecting this latest quarter to mark a

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<v Speaker 1>low point for Volvocar's earning. So maybe now the only

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<v Speaker 1>way is up. But these earnings this morning really confirmed

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<v Speaker 1>this huge downturn.

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<v Speaker 2>There the Stockmovers podcast from Bloomberg Radio. Check back with

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