1 00:00:02,520 --> 00:00:08,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News, The. 2 00:00:08,720 --> 00:00:12,560 Speaker 2: Stock Movers Report, your roundup of companies making moves in 3 00:00:12,600 --> 00:00:15,880 Speaker 2: the stock market, harnessing the power of Bloomberg Data. 4 00:00:16,520 --> 00:00:18,200 Speaker 3: Let's look us some of the stocks on the move 5 00:00:18,360 --> 00:00:21,159 Speaker 3: today in Europe on Caroline Hepker with Lizzie Burton, and 6 00:00:21,200 --> 00:00:25,160 Speaker 3: we're joined by Bloomberg reporter Chloe Malay. The defense stock 7 00:00:25,360 --> 00:00:28,800 Speaker 3: rally here in Europe. BAE Systems one of the big winners. 8 00:00:29,240 --> 00:00:32,600 Speaker 3: What is prompting what is a very significant surge. 9 00:00:32,960 --> 00:00:35,720 Speaker 1: It's all about Trump. So Trump said that he wanted 10 00:00:35,760 --> 00:00:38,879 Speaker 1: to increase the US military budget, and it's not a 11 00:00:38,880 --> 00:00:42,479 Speaker 1: small booster. He's is requesting an increase of more than 12 00:00:42,560 --> 00:00:46,160 Speaker 1: fifty percent in annual defense spending for twenty twenty seven 13 00:00:46,400 --> 00:00:48,559 Speaker 1: and he said that that would be paid for by 14 00:00:48,680 --> 00:00:51,800 Speaker 1: the tariff revenue that was accumulated over the last year. 15 00:00:51,840 --> 00:00:55,440 Speaker 1: And so this is something that really really boosted Asian 16 00:00:55,480 --> 00:00:58,080 Speaker 1: defense stocks and now we are seeing the same with 17 00:00:58,200 --> 00:01:01,760 Speaker 1: the European names as well. Bea is really driving at 18 00:01:01,760 --> 00:01:05,360 Speaker 1: that rally. This is a company that generates almost half 19 00:01:05,360 --> 00:01:07,440 Speaker 1: of its revenue in the US, so it is much 20 00:01:07,480 --> 00:01:10,360 Speaker 1: more exposed than some of those other defense names. And 21 00:01:10,440 --> 00:01:13,160 Speaker 1: we also know, of course that Trump has previously been 22 00:01:13,280 --> 00:01:15,920 Speaker 1: a little bit more warm to the UK and he 23 00:01:16,000 --> 00:01:18,880 Speaker 1: has been to continental Europe, so that might play into 24 00:01:18,920 --> 00:01:22,120 Speaker 1: that as well. But we're really seeing positive movements across 25 00:01:22,120 --> 00:01:25,399 Speaker 1: the board. We have Ryan Mittel, also, Bileonardo also up, 26 00:01:25,440 --> 00:01:28,560 Speaker 1: all of those defense names definitely in the green today. 27 00:01:29,120 --> 00:01:32,600 Speaker 1: It's also worth noting, of course, that the continued heightened 28 00:01:32,600 --> 00:01:37,039 Speaker 1: geopolitical tensions that we've got with the Venezuela situation still unfolding, 29 00:01:37,600 --> 00:01:39,880 Speaker 1: is also really helpful for that defense straight so that's 30 00:01:39,880 --> 00:01:40,520 Speaker 1: another boost. 31 00:01:40,760 --> 00:01:43,880 Speaker 3: Look, I think it's worth saying that there are big caveats, 32 00:01:43,920 --> 00:01:47,160 Speaker 3: aren't there around President Trump and that request that Congress 33 00:01:47,160 --> 00:01:51,320 Speaker 3: increase the Pentagon's budget by this enormous amount. You know, 34 00:01:51,560 --> 00:01:54,200 Speaker 3: I just sort of I'm thinking about the numbers. The 35 00:01:54,280 --> 00:01:57,720 Speaker 3: US already spends almost a trillion dollars on defense. For 36 00:01:57,800 --> 00:02:02,040 Speaker 3: the UK it's about sixty billion, and versus even versus 37 00:02:02,120 --> 00:02:05,320 Speaker 3: China with its military, you know, they're not thought to 38 00:02:05,320 --> 00:02:08,440 Speaker 3: spend anywhere near what the US does, So I think 39 00:02:08,600 --> 00:02:11,960 Speaker 3: globally the number is absolutely huge, isn't it that we're 40 00:02:12,000 --> 00:02:15,080 Speaker 3: thinking about? Anyway, that was on my mind Lizzie. 41 00:02:14,760 --> 00:02:17,079 Speaker 4: No, it's really helpful perspective. Let's get back to the 42 00:02:17,120 --> 00:02:21,440 Speaker 4: individual stocks. The Swiss French recruitment company A Deco Chloe 43 00:02:21,480 --> 00:02:23,520 Speaker 4: is facing a drop this morning. What does that tell 44 00:02:23,560 --> 00:02:25,360 Speaker 4: us about the broader labor market trends? 45 00:02:25,520 --> 00:02:28,160 Speaker 1: Well, the business of recruitment isn't the best business to 46 00:02:28,200 --> 00:02:30,040 Speaker 1: be and perhaps at the moment, given that we're in 47 00:02:30,160 --> 00:02:33,600 Speaker 1: quite a tight labor market, companies are hesitant to spend 48 00:02:33,639 --> 00:02:36,679 Speaker 1: and candidates are also hesitant to move jobs as well. 49 00:02:36,680 --> 00:02:40,320 Speaker 1: And so Jeffrey's analysts downgraded three names in that recruitment 50 00:02:40,360 --> 00:02:44,320 Speaker 1: sector in Europe this morning, so Ranstaed hayes Enodecco in particular, 51 00:02:44,320 --> 00:02:46,680 Speaker 1: and A Decco was the one that moved the lowest 52 00:02:46,680 --> 00:02:49,799 Speaker 1: this morning, but all three were weaker So and I 53 00:02:49,919 --> 00:02:52,840 Speaker 1: said that those recruiters are facing a really cloudy outlook 54 00:02:52,880 --> 00:02:55,480 Speaker 1: in twenty twenty six and that they'll be facing both 55 00:02:55,520 --> 00:02:59,240 Speaker 1: cyclical headwinds and that will be exacerbated by structural new 56 00:02:59,320 --> 00:03:02,320 Speaker 1: structural challenges and there should really keep a lid on 57 00:03:02,360 --> 00:03:04,920 Speaker 1: earnings at this year. So this is not great news 58 00:03:04,919 --> 00:03:07,840 Speaker 1: for a sector that's already had a tough twenty twenty five. 59 00:03:07,880 --> 00:03:10,359 Speaker 1: A tough twenty twenty four, you know, there'll be certainly 60 00:03:10,400 --> 00:03:13,880 Speaker 1: even more pressure going forward. And AI is also another 61 00:03:13,919 --> 00:03:16,440 Speaker 1: big threat, first of all because of the impact on 62 00:03:16,480 --> 00:03:19,480 Speaker 1: the labor market itself, but also because it can make 63 00:03:19,960 --> 00:03:23,160 Speaker 1: the need for recruiters as an intermediary a bit more 64 00:03:23,160 --> 00:03:25,560 Speaker 1: redundant as well. So definitely want to keep an eye on. 65 00:03:25,800 --> 00:03:29,679 Speaker 3: Okay, now we've had a number of reports out for 66 00:03:29,880 --> 00:03:34,400 Speaker 3: UK businesses. There's a profit warning too from AB Foods today. 67 00:03:35,040 --> 00:03:37,160 Speaker 3: Why and how are the markets reacting to that? 68 00:03:37,480 --> 00:03:39,640 Speaker 1: Well? AB food shares are down quite a lot this 69 00:03:39,720 --> 00:03:42,280 Speaker 1: morning on the back of that profit warning. So AB 70 00:03:42,400 --> 00:03:45,240 Speaker 1: Foods has consists of Primark, but then also a range 71 00:03:45,560 --> 00:03:49,480 Speaker 1: of food businesses, including brands like Reveta, Crackers, King's Mill, Bread, 72 00:03:49,480 --> 00:03:52,280 Speaker 1: et cetera. And it's said this morning that kind of 73 00:03:52,360 --> 00:03:57,080 Speaker 1: everything was weak, but Primmark in particular struggling in continental 74 00:03:57,120 --> 00:03:59,480 Speaker 1: Europe and in the US. It's doing a little bit 75 00:03:59,520 --> 00:04:02,520 Speaker 1: better in UK, but definitely not as well as we 76 00:04:02,560 --> 00:04:05,240 Speaker 1: could have expected. After we saw the numbers from Next 77 00:04:05,280 --> 00:04:08,360 Speaker 1: earlier this week, it seems that perhaps that really good 78 00:04:08,400 --> 00:04:12,080 Speaker 1: performance from Next wasn't as indicative of a broader health 79 00:04:12,080 --> 00:04:15,120 Speaker 1: of the UK high street as we might have hoped, 80 00:04:15,240 --> 00:04:18,200 Speaker 1: and the profit warning also comes at a really pivotal 81 00:04:18,200 --> 00:04:20,919 Speaker 1: time for Abe Foods. It announced that it was considering 82 00:04:21,120 --> 00:04:24,120 Speaker 1: a splitting Primark from the rest of that business last year, 83 00:04:24,680 --> 00:04:27,000 Speaker 1: and that decision is expected to be coming in the 84 00:04:27,040 --> 00:04:29,960 Speaker 1: next few months, by April, so let's keep an eye 85 00:04:30,040 --> 00:04:32,080 Speaker 1: on that as well. With that news of the profit 86 00:04:32,120 --> 00:04:33,040 Speaker 1: warning in mind as. 87 00:04:32,960 --> 00:04:38,320 Speaker 2: Well the Stock Movers report from Bloomberg Radio. Check back 88 00:04:38,360 --> 00:04:40,599 Speaker 2: with us throughout the day for the latest roundup of 89 00:04:40,640 --> 00:04:43,919 Speaker 2: companies making news on Wall Street and for the latest 90 00:04:43,960 --> 00:04:48,160 Speaker 2: market moving headlines. Listen to Bloomberg Radio Live, catch us 91 00:04:48,200 --> 00:04:51,919 Speaker 2: on YouTube, Bloomberg dot com, and on Applecarplay and Android 92 00:04:51,960 --> 00:04:53,919 Speaker 2: Auto with the Bloomberg Business app.