Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: The Stock Movers Report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look now at some of the stocks
Speaker 3: on the move today in Europe. I'm Rachel Evans with
Speaker 3: Caroline Hepka. We're joined with Bloomberg reporter Chloe Malay. Chloe,
Speaker 3: thanks for coming. We had a rare primetime speech with
Speaker 3: President Trump yesterday relating to the Iran war. How are
Speaker 3: energy stocks reacting to that this morning? Likes of BP,
Speaker 3: for example.
Speaker 1: Yesterday there was some signaling from Trump that the war
Speaker 1: might be coming to an end, and so that led
Speaker 1: oil down and then oil majors down as well. But
Speaker 1: then yesterday evening, in that primetime speech that you mentioned,
Speaker 1: Trump at a very different tone, saying that the US
Speaker 1: would hit Iran extremely hard over the next two to
Speaker 1: three weeks. He did not present any sort of concrete
Speaker 1: plan for exiting the war or also reopening at the
Speaker 1: strait off of Hole Moves, which remains largely closed. So
Speaker 1: the markets interpreted this as the fact that the resolution
Speaker 1: to this conflict and might not come as easily or
Speaker 1: as swiftly as we thought yesterday, and so we saw
Speaker 1: oil jumping once again and then leading those oil majors
Speaker 1: higher once again this morning. So we might see more
Speaker 1: of this back and forth with oil jumping and retreating
Speaker 1: as the market is try and really figure out how
Speaker 1: and when exactly this war might end. But in the meantime,
Speaker 1: BP is definitely in the green this morning.
Speaker 3: Yeah. Absolutely.
Speaker 1: Let's think about what it means for the airline business.
Speaker 3: We had some news out of LIFTANSA today.
Speaker 1: Yeah, so there was a big rally yesterday among those
Speaker 1: European airlines because oil was falling, so it was all
Speaker 1: part of this same story. Really. There was a sense
Speaker 1: of relief from airlines that had dealt with those flight disruptions,
Speaker 1: those higher fuel costs, and so they reacted quite positively
Speaker 1: to the news that the war might come to an end.
Speaker 1: But then today, as mentioned, we have oil jumping again
Speaker 1: and therefore airlines down and so full liftans andticular. There's
Speaker 1: also another thing that is really weighing on the stock
Speaker 1: this morning, which is a downgrade from Morgan Stanley, with
Speaker 1: analyst saying that there is a risk that fuel costs
Speaker 1: could stay higher for longer and that Luftans is particularly
Speaker 1: vulnerable to that. They said that even with a de
Speaker 1: escalation in the coming weeks, there would still be some
Speaker 1: refining capacity constraints, some constraints around logistics, around inventories, and
Speaker 1: that means that a shortage of jet fuel is harder
Speaker 1: and slower to resolve, and therefore would mean fuel costs
Speaker 1: of staying higher. And then a separate note from Blueberg
Speaker 1: Intelligence this morning also mentioned the same thing. They said
Speaker 1: that companies like Luftanza but also appears like AAG and
Speaker 1: Air France and Ryanair do have fuel hedges and that
Speaker 1: stabilizes prices to an extent, but then that doesn't secure
Speaker 1: product delivery, and so that makes those airlines very vulnerable
Speaker 1: to supply shocks and that could in turn curtail flying
Speaker 1: as well. Sotander is definitely taking bit of a hit
Speaker 1: this morning as a result.
Speaker 3: Interesting it starts hitting people's holidays. Finally, we had some
Speaker 3: news for Air France. How's the market reaction to that.
Speaker 1: Yeah, so there's a different airline story this morning from
Speaker 1: fuel costs. So, Air France submitted the first bid for
Speaker 1: a stake in the Portuguese airline TAP, so that essentially
Speaker 1: kicks off the race for that company after Air France,
Speaker 1: but then also Liftans and IAG were all invited last
Speaker 1: year to submit preliminary offers for that Portuguese airline. The
Speaker 1: Portuguese government is planning to sell as much as a
Speaker 1: forty nine point nine percent of the company, and it's
Speaker 1: said that it needs to be part of a larger
Speaker 1: groups that it can gain scale and really secure a
Speaker 1: long term future. So now the government will start reviewing
Speaker 1: some initial proposals and then the shortlisted bidders will have
Speaker 1: ninety days after that to submit binding offers. So we
Speaker 1: are going to be waiting for Liftans and IAG to
Speaker 1: potentially also submit some of those non binding offers to
Speaker 1: start with. But Air France shares were a little bit
Speaker 1: weaker this morning, although they might have more to do
Speaker 1: with the oil story that we were mentioning rather than
Speaker 1: this potential m and A.
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