Speaker 1: Bloomberg Audio Studios, Podcasts, radio News, The.
Speaker 2: Stock Movers Report, your roundup of companies making moves in
Speaker 2: the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's look us some of the stocks on the move
Speaker 3: today in Europe on Caroline Hepker with Lizzie Burton, and
Speaker 3: we're joined by Bloomberg reporter Chloe Malay. The defense stock
Speaker 3: rally here in Europe. BAE Systems one of the big winners.
Speaker 3: What is prompting what is a very significant surge.
Speaker 1: It's all about Trump. So Trump said that he wanted
Speaker 1: to increase the US military budget, and it's not a
Speaker 1: small booster. He's is requesting an increase of more than
Speaker 1: fifty percent in annual defense spending for twenty twenty seven
Speaker 1: and he said that that would be paid for by
Speaker 1: the tariff revenue that was accumulated over the last year.
Speaker 1: And so this is something that really really boosted Asian
Speaker 1: defense stocks and now we are seeing the same with
Speaker 1: the European names as well. Bea is really driving at
Speaker 1: that rally. This is a company that generates almost half
Speaker 1: of its revenue in the US, so it is much
Speaker 1: more exposed than some of those other defense names. And
Speaker 1: we also know, of course that Trump has previously been
Speaker 1: a little bit more warm to the UK and he
Speaker 1: has been to continental Europe, so that might play into
Speaker 1: that as well. But we're really seeing positive movements across
Speaker 1: the board. We have Ryan Mittel, also, Bileonardo also up,
Speaker 1: all of those defense names definitely in the green today.
Speaker 1: It's also worth noting, of course, that the continued heightened
Speaker 1: geopolitical tensions that we've got with the Venezuela situation still unfolding,
Speaker 1: is also really helpful for that defense straight so that's
Speaker 1: another boost.
Speaker 3: Look, I think it's worth saying that there are big caveats,
Speaker 3: aren't there around President Trump and that request that Congress
Speaker 3: increase the Pentagon's budget by this enormous amount. You know,
Speaker 3: I just sort of I'm thinking about the numbers. The
Speaker 3: US already spends almost a trillion dollars on defense. For
Speaker 3: the UK it's about sixty billion, and versus even versus
Speaker 3: China with its military, you know, they're not thought to
Speaker 3: spend anywhere near what the US does, So I think
Speaker 3: globally the number is absolutely huge, isn't it that we're
Speaker 3: thinking about? Anyway, that was on my mind Lizzie.
Speaker 4: No, it's really helpful perspective. Let's get back to the
Speaker 4: individual stocks. The Swiss French recruitment company A Deco Chloe
Speaker 4: is facing a drop this morning. What does that tell
Speaker 4: us about the broader labor market trends?
Speaker 1: Well, the business of recruitment isn't the best business to
Speaker 1: be and perhaps at the moment, given that we're in
Speaker 1: quite a tight labor market, companies are hesitant to spend
Speaker 1: and candidates are also hesitant to move jobs as well.
Speaker 1: And so Jeffrey's analysts downgraded three names in that recruitment
Speaker 1: sector in Europe this morning, so Ranstaed hayes Enodecco in particular,
Speaker 1: and A Decco was the one that moved the lowest
Speaker 1: this morning, but all three were weaker So and I
Speaker 1: said that those recruiters are facing a really cloudy outlook
Speaker 1: in twenty twenty six and that they'll be facing both
Speaker 1: cyclical headwinds and that will be exacerbated by structural new
Speaker 1: structural challenges and there should really keep a lid on
Speaker 1: earnings at this year. So this is not great news
Speaker 1: for a sector that's already had a tough twenty twenty five.
Speaker 1: A tough twenty twenty four, you know, there'll be certainly
Speaker 1: even more pressure going forward. And AI is also another
Speaker 1: big threat, first of all because of the impact on
Speaker 1: the labor market itself, but also because it can make
Speaker 1: the need for recruiters as an intermediary a bit more
Speaker 1: redundant as well. So definitely want to keep an eye on.
Speaker 3: Okay, now we've had a number of reports out for
Speaker 3: UK businesses. There's a profit warning too from AB Foods today.
Speaker 3: Why and how are the markets reacting to that?
Speaker 1: Well? AB food shares are down quite a lot this
Speaker 1: morning on the back of that profit warning. So AB
Speaker 1: Foods has consists of Primark, but then also a range
Speaker 1: of food businesses, including brands like Reveta, Crackers, King's Mill, Bread,
Speaker 1: et cetera. And it's said this morning that kind of
Speaker 1: everything was weak, but Primmark in particular struggling in continental
Speaker 1: Europe and in the US. It's doing a little bit
Speaker 1: better in UK, but definitely not as well as we
Speaker 1: could have expected. After we saw the numbers from Next
Speaker 1: earlier this week, it seems that perhaps that really good
Speaker 1: performance from Next wasn't as indicative of a broader health
Speaker 1: of the UK high street as we might have hoped,
Speaker 1: and the profit warning also comes at a really pivotal
Speaker 1: time for Abe Foods. It announced that it was considering
Speaker 1: a splitting Primark from the rest of that business last year,
Speaker 1: and that decision is expected to be coming in the
Speaker 1: next few months, by April, so let's keep an eye
Speaker 1: on that as well. With that news of the profit
Speaker 1: warning in mind as.
Speaker 2: Well the Stock Movers report from Bloomberg Radio. Check back
Speaker 2: with us throughout the day for the latest roundup of
Speaker 2: companies making news on Wall Street and for the latest
Speaker 2: market moving headlines. Listen to Bloomberg Radio Live, catch us
Speaker 2: on YouTube, Bloomberg dot com, and on Applecarplay and Android
Speaker 2: Auto with the Bloomberg Business app.