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 00:00:16,600 --> 00:00:18,000 Speaker 3: Let's take a look at some of the stocks on 5 00:00:18,040 --> 00:00:20,200 Speaker 3: the move today here in Europe. I'm Caroline Hepgar with 6 00:00:20,280 --> 00:00:22,520 Speaker 3: Lizzie Burton, and we joined by Bloomberg with port of 7 00:00:22,600 --> 00:00:25,560 Speaker 3: Chloe Malay. Chloe. Good to speak to you the start 8 00:00:25,600 --> 00:00:29,800 Speaker 3: of this week. European defense stocks getting quite a significant 9 00:00:29,880 --> 00:00:34,159 Speaker 3: lift given the concerns around Greenland. How are the likes 10 00:00:34,159 --> 00:00:36,960 Speaker 3: of BA Systems and others reacting well. 11 00:00:36,880 --> 00:00:39,160 Speaker 1: Quite positively. It's been, as you mentioned, a really good 12 00:00:39,200 --> 00:00:42,080 Speaker 1: start to the year for defense stocks, and that has 13 00:00:42,120 --> 00:00:44,839 Speaker 1: given all the geopolitical tensions that have been happening. And 14 00:00:45,120 --> 00:00:48,000 Speaker 1: we are starting this week again quite strongly, and this time, 15 00:00:48,159 --> 00:00:50,040 Speaker 1: as you said, because of Greenland. So a group of 16 00:00:50,080 --> 00:00:53,959 Speaker 1: European countries, led by Germany and the UK, is discussing 17 00:00:54,000 --> 00:00:56,760 Speaker 1: plans at the moment for military presence in Greenland, and 18 00:00:57,160 --> 00:00:59,840 Speaker 1: that would be with the purpose of pushing back against 19 00:01:00,280 --> 00:01:02,640 Speaker 1: Trump's threats to take over that territory. You know, he 20 00:01:02,680 --> 00:01:05,920 Speaker 1: said previously that he wasn't ruling out the possibility of 21 00:01:06,040 --> 00:01:09,000 Speaker 1: military force to do so, and then also to really 22 00:01:09,040 --> 00:01:12,319 Speaker 1: show that Europe is serious about a security in the 23 00:01:12,400 --> 00:01:16,240 Speaker 1: Arctic region and that they have the situation they're under control. 24 00:01:16,920 --> 00:01:20,600 Speaker 1: Trump insisted on Sunday that the US would own Greenland, 25 00:01:20,800 --> 00:01:25,600 Speaker 1: saying that acquiring that territory was necessary for national security reasons. 26 00:01:25,640 --> 00:01:28,280 Speaker 1: So all of that points to growing tensions and growing 27 00:01:28,360 --> 00:01:31,760 Speaker 1: uncertainty really because it is still unclear what Trump is 28 00:01:31,840 --> 00:01:34,880 Speaker 1: actually planning to do, and that of course that uncertainty, 29 00:01:35,000 --> 00:01:37,959 Speaker 1: that tension is of course really beneficial for that defense 30 00:01:38,000 --> 00:01:40,959 Speaker 1: trade and we are seeing those defense stocks move high 31 00:01:41,080 --> 00:01:44,080 Speaker 1: NBA in particular, perhaps because the UK is one of 32 00:01:44,080 --> 00:01:47,720 Speaker 1: the big drivers behind behind this plan to put military 33 00:01:47,720 --> 00:01:48,800 Speaker 1: forces in Greenland. 34 00:01:49,000 --> 00:01:52,760 Speaker 3: Okay. Also turning to Barclays, we're looking at it down 35 00:01:52,800 --> 00:01:55,440 Speaker 3: this morning, Clary after Trump's comments on credit card rates, 36 00:01:55,440 --> 00:01:56,360 Speaker 3: talks through that story. 37 00:01:56,520 --> 00:01:58,720 Speaker 1: Yeah, so Trump called for a one year cap on 38 00:01:58,760 --> 00:02:01,200 Speaker 1: those credit card interest rates at ten percent and said 39 00:02:01,240 --> 00:02:03,880 Speaker 1: that credit card lenders would be in violation of the 40 00:02:03,960 --> 00:02:06,080 Speaker 1: law if they don't do that, and there's a deadline 41 00:02:06,120 --> 00:02:09,520 Speaker 1: of January twentieth. So Barclays was weaker this morning on 42 00:02:09,560 --> 00:02:11,600 Speaker 1: the back of that. It has a big US credit 43 00:02:11,639 --> 00:02:15,200 Speaker 1: card business, and then we can also probably expect US 44 00:02:15,200 --> 00:02:18,240 Speaker 1: payers like JP Morgan and City Group would also be 45 00:02:18,400 --> 00:02:22,120 Speaker 1: lower today. So the average interest rate is about twenty percent, 46 00:02:22,160 --> 00:02:25,280 Speaker 1: which is obviously quite steep for consumers. But banks have 47 00:02:25,480 --> 00:02:28,440 Speaker 1: argued that reducing those rates would be a threat to 48 00:02:28,480 --> 00:02:31,799 Speaker 1: profitability for them because there's you know, with credit cards, 49 00:02:31,800 --> 00:02:34,520 Speaker 1: there's no asset to repossess when there's a default, and 50 00:02:34,560 --> 00:02:37,720 Speaker 1: therefore there's no way to cushion that loss, and those 51 00:02:37,840 --> 00:02:41,320 Speaker 1: the arguments therefore is that lower rates might mean that Americans, 52 00:02:41,440 --> 00:02:44,440 Speaker 1: that many Americans could actually lose access to credit and 53 00:02:44,480 --> 00:02:47,079 Speaker 1: therefore be left to pay their lenders and loan sharks 54 00:02:47,080 --> 00:02:50,639 Speaker 1: and whatever. And so this is the argument from banks. 55 00:02:50,680 --> 00:02:52,960 Speaker 1: But we'll see if Trump keeps pushing this. But in 56 00:02:53,000 --> 00:02:56,240 Speaker 1: the meantime, we are seeing Barclays react quite negatively to that. 57 00:02:56,800 --> 00:03:01,520 Speaker 3: Yeah. Again, very interesting sort of intervention into a particular 58 00:03:01,600 --> 00:03:04,040 Speaker 3: business with sort of instant impact. 59 00:03:04,080 --> 00:03:04,360 Speaker 1: Really. 60 00:03:04,560 --> 00:03:10,080 Speaker 3: Morgan Stanley also talking about its preference for software over 61 00:03:10,160 --> 00:03:15,320 Speaker 3: IT services that having an impact on names hire in Europe. 62 00:03:15,520 --> 00:03:18,520 Speaker 1: Yeah. So cap Gemini in particular is down this morning 63 00:03:18,520 --> 00:03:21,080 Speaker 1: after Morgan Stanley downgraded a bunch of stocks in the 64 00:03:21,120 --> 00:03:24,560 Speaker 1: IT sector IT services sector in particular, saying that the 65 00:03:24,639 --> 00:03:27,440 Speaker 1: industry will not be seeing any kind of clear rally 66 00:03:27,720 --> 00:03:30,000 Speaker 1: in twenty twenty six. So one of the biggest threats 67 00:03:30,040 --> 00:03:33,320 Speaker 1: for cap Gemini in particular is actually AI because that 68 00:03:33,400 --> 00:03:37,119 Speaker 1: comes with what analysts have called disintermediation risks, so essentially 69 00:03:37,720 --> 00:03:39,640 Speaker 1: a fancy word just to say that the service is 70 00:03:39,640 --> 00:03:42,720 Speaker 1: provided by cap Gemini, and some of those piers could 71 00:03:42,720 --> 00:03:47,000 Speaker 1: actually become redundant in the AI era. And in addition 72 00:03:47,040 --> 00:03:50,120 Speaker 1: to that, the clients of cap Gemini are also quite 73 00:03:50,200 --> 00:03:53,080 Speaker 1: reluctant perhaps at the moment, to spend on those IT 74 00:03:53,320 --> 00:03:58,240 Speaker 1: services because of continued economic uncertainty. This is the only 75 00:03:58,320 --> 00:04:00,800 Speaker 1: cell rating on that stock don Jim and I, which 76 00:04:01,080 --> 00:04:03,640 Speaker 1: might mean that this is perhaps quite a contrariant take 77 00:04:03,680 --> 00:04:07,080 Speaker 1: from Morgan Stanley and the company might actually end up 78 00:04:07,120 --> 00:04:09,280 Speaker 1: being in better shape than fit. But we'll see if 79 00:04:09,480 --> 00:04:13,040 Speaker 1: Morgan Stanley analysts actually end up being proven right. But 80 00:04:13,080 --> 00:04:15,000 Speaker 1: in the meantime, this downgrade has led to a lot 81 00:04:15,040 --> 00:04:16,520 Speaker 1: of weakness in that stock. 82 00:04:18,000 --> 00:04:22,040 Speaker 2: The Stock Movers Report from Bloomberg Radio. Check back with 83 00:04:22,120 --> 00:04:24,680 Speaker 2: us throughout the day for the latest roundup of companies 84 00:04:24,760 --> 00:04:27,880 Speaker 2: making news on Wall Street and for the latest market 85 00:04:27,880 --> 00:04:32,360 Speaker 2: moving headlines. Listen to Bloomberg Radio Live. Catch us on YouTube, 86 00:04:32,440 --> 00:04:35,960 Speaker 2: Bloomberg dot com, and on Applecarplay and Android Auto with 87 00:04:36,000 --> 00:04:37,520 Speaker 2: the Bloomberg Business app.