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Stephanie Batchelor: Milford Asset Management analyst on LVMH's shares dropping · Best of Business

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  Speaker 1: You're listening to a podcast from News talks'd be follow
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  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Well, our third quarter earning season in the US is
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  Speaker 2: kicked off with a hessen't a rural plenty of volatility
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  Speaker 2: and they're Stephanie Bachelor from Milford, acidt Management is with
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  Speaker 2: us ay stef Hi have that? Okay, what's going on
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  Speaker 2: in the luxury goods space because there was a lot
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  Speaker 2: of excitement after the China stimulus announcements, but that's now
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  Speaker 2: faded and it's been overshadowed by pretty weak earnings. Yeah.
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  Speaker 3: Yeah, so that's right. The one of the key areas
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  Speaker 3: of weakness for luxury goods companies over the last year
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  Speaker 3: has been China because it's historically been a very important
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  Speaker 3: part of the world for them, and of course they've
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  Speaker 3: got a weak housing market, very poor consumer sentiment, and
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  Speaker 3: so the Chinese consumer hasn't been traveling or spending as
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  Speaker 3: much as they would historically. If we look at Louis
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  Speaker 3: Vaton Mouette Tennessee or LVMH, it's the largest luxury goods
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  Speaker 3: company in the world, and it's sort of considered a
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  Speaker 3: bell weather for the space. Its share price was down
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  Speaker 3: about thirty percent between March and September. But when the
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  Speaker 3: China stimulus was announced, the market it got really excited
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  Speaker 3: thinking that Chinese demand would be reignited, and shars actually
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  Speaker 3: moved up twenty percent in just one week. Following that move,
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  Speaker 3: the stock faded again because questions have started to arise
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  Speaker 3: around you know, how long it would take for the
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  Speaker 3: stimulus to boost demand and by how much because it's
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  Speaker 3: likely more targeted at a lower income consumer, which isn't
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  Speaker 3: the typical luxury goods customer. And then you mentioned earnings, So, yeah,
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  Speaker 3: it was a pretty poor set of numbers. Its key division,
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  Speaker 3: Fashion and Leather Goods, had revenue four five percent in
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  Speaker 3: the quarter, and that was the first quarterly declined since
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  Speaker 3: two thousand and nine if you exclude COVID, So shares
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  Speaker 3: fell four percent and it dragged a bunch of other
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  Speaker 3: luxury names down on the day two.
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  Speaker 2: Yeah, and then what about the semiconductors, because it sounds
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  Speaker 2: like there's been some winners and losers there as well.
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  Speaker 3: Yeah, so that's been an interesting space last week. ASML Now,
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  Speaker 3: this is a company that provides equipment to the big
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  Speaker 3: semiconductor manufacturers. They released their results and showed a miss
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  Speaker 3: on all as well as a reduction to their twenty
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  Speaker 3: twenty five expectations. So shares were down to fifteen percent
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  Speaker 3: on the day, and it caused a bit of concern
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  Speaker 3: that this AI boom might be starting to fizzle out.
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  Speaker 3: But it does seem as though the weakness might might
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  Speaker 3: have been just sort of specific customers or company factors,
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  Speaker 3: because just a few days later, TSMC, which is one
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  Speaker 3: of ASML's customers and is the largest semiconductor manufacturer in
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  Speaker 3: the world, they reported a record third quarter. So it
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  Speaker 3: indicated that, you know, the AI boom is still alive
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  Speaker 3: and well. And so TSMC shares rallied ten percent on
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  Speaker 3: the day.
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  Speaker 2: Yeah, any bright spots in the evening season so far
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  Speaker 2: for you.
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  Speaker 3: Yeah, So TSMC is one. But also the big US
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  Speaker 3: banks reported very strong results. They're seeing some green shoots
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  Speaker 3: come through for capital markets. If you look at Morgan Stanley,
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  Speaker 3: they said, you know, we're in the early stages of
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  Speaker 3: a multi year capital markets recovery, and so corporates are
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  Speaker 3: getting more comfortable thinking about mergers and acquisitions, raising equity,
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  Speaker 3: all of which drives those big banks investment banking fees
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  Speaker 3: and Another stock worth mentioning is Netflix, so which you
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  Speaker 3: know their shares were up eleven percent after it reported
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  Speaker 3: its most profitable quarter ever and despite subscriber growth actually slowing,
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  Speaker 3: Netflix still has very attractive opportunities to boost profits through
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  Speaker 3: either its new ad supported membership model or price increas.
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  Speaker 2: It's fascinating stuff. Steffank you for running us. So It's
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  Speaker 2: Stephanie Bachelor, Milford Asset Management.
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