WEBVTT - BMW Drops, ArcelorMittal Rises, ASML Falls

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

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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

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<v Speaker 3>Let's look at some stocks on the move today. Here

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<v Speaker 3>in you have, I'm Caroline Hepge along side of Bloomberg

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<v Speaker 3>Reportacloim Malay.

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<v Speaker 1>Good morning.

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<v Speaker 3>BMW declining quite significantly. I've been talking about Germany's industrial

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<v Speaker 3>production figures. There's been a big hit to the German

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<v Speaker 3>auto makers. Why is BMW particularly bad today.

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<v Speaker 1>Well, just last night it lowered its outlook, cut its

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<v Speaker 1>guidance due to tariff costs and then also a continuation

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<v Speaker 1>of week sales in China, and China is a big

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<v Speaker 1>market for those carmakers, but European manufacturers are really struggling

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<v Speaker 1>to compete with the cheaper Chinese manufacturers that are really

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<v Speaker 1>gaining attraction there. And of course those weekses in China

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<v Speaker 1>are also compounded by weeks sales in Europe and in

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<v Speaker 1>the US, where you know, we've got demond for luxury

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<v Speaker 1>cars in particular that BMW makes, which is very.

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<v Speaker 3>Low at the moment.

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<v Speaker 1>You know, we saw a Porsche flagging that weakness for

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<v Speaker 1>the luxury electric vehicles that it makes just a couple

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<v Speaker 1>of weeks ago. So this really shows that the German

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<v Speaker 1>car industry, which is very reliant on exports, is going

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<v Speaker 1>to be facing kind of continued challenges going forward. Another

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<v Speaker 1>thing worth mentioning is that BMW now expects to be

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<v Speaker 1>reimburst custom duties next year instead of twenty twenty five.

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<v Speaker 1>And that's, you know, after the US lower tariffs retroactively

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<v Speaker 1>to August first. So the guidance car definitely is driving

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<v Speaker 1>the shares down today. We'll see how much more of

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<v Speaker 1>these we get in that car making sector as the

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<v Speaker 1>earning season progresses.

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<v Speaker 3>Yeah. Absolutely. BMW share price down well over six percent

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<v Speaker 3>in the first hour of European trading. Arsalin Mittal, though,

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<v Speaker 3>has some better tariff news.

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<v Speaker 1>Yeah, absolutely so. Osla Matal a steel company, a steel maker,

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<v Speaker 1>so it was placed on positive catalyst watch at City

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<v Speaker 1>and that's because the company will benefit from the European

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<v Speaker 1>Union's plan to restrict foreign steel imports. So essentially the

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<v Speaker 1>EU is mirroring the policy from the US, which currently

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<v Speaker 1>imposes fifty percent tariffs on those steel imports. So City

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<v Speaker 1>analysts said that those measures should be very supportive to

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<v Speaker 1>that European steel industry, which was one of the first

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<v Speaker 1>sectors that Trump had singled out when he started and

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<v Speaker 1>started slaffing those tariffs to all of the different industries,

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<v Speaker 1>and that was obviously reflected in the shares kind of

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<v Speaker 1>tumbling across that steel industry. But hopefully this plan will

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<v Speaker 1>turn things around for Aslo Matel Specifically, it has a

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<v Speaker 1>thirty percent European market share, so more steeled shipments could

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<v Speaker 1>translate into a profit boost up to seven fifty million dollars,

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<v Speaker 1>which is not negligible of course, so that's quite positive

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<v Speaker 1>for that company.

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<v Speaker 3>Now, interesting that overall European stocks after the first hour

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<v Speaker 3>are actually up this morning. But ASML shares have been

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<v Speaker 3>hit hard. Why Yeah, quite badly.

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<v Speaker 1>This, my ASML is because of the announcement of a

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<v Speaker 1>US probe into semiconductor exports to China. So lawmakers in

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<v Speaker 1>the US said that ASML, but also other companies like

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<v Speaker 1>Tokyo Electron Applying Materials and Land Research, had fueled semiconductor

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<v Speaker 1>manufacturing in China and made sizeable return selling equipment to

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<v Speaker 1>Chinese state owned and military linked companies. And the statement

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<v Speaker 1>from that committee said that semiconductor development in China is

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<v Speaker 1>a threat to US national security, so this could mean

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<v Speaker 1>potentially even more export restrictions, which could hurt sales for

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<v Speaker 1>ASML and those peers that I mentioned. This is a

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<v Speaker 1>big setback for SML because it has really, it had

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<v Speaker 1>really benefited recently from quite positive newsflow around AI. Recently

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<v Speaker 1>there were quite new high profile partnerships like the deal

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<v Speaker 1>between AMD and open Ai, for example, and just quite

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<v Speaker 1>generally bullish sentiment around that sector. But obviously this is

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<v Speaker 1>a bit of a setback for SML. It's really really

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<v Speaker 1>hit the shares. As you said this morning.

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<v Speaker 2>The Stockmovers report from Bloomberg Radio. Check back with us

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