Latest news with #SquawkBoxEurope
CNBC
an hour ago
- Business
- CNBC
European defense giants could be about to get another big push higher, Bank of America says
European defense stocks could be set for another big tailwind, according to an analyst who says the sector is about to see a surge in demand from one particular pocket of the market. Speaking to CNBC's "Squawk Box Europe" on Thursday, Ben Heelan, Bank of America's head of EU industrials research, said his team expects European long-only investors are yet to buy into the defense space. Many ESG funds, which have historically swerved defense investments, appear to have shifted their stance on the sector amid rising geopolitical instability and commitments from Western governments to grow their security budgets. Heelan pointed to this trend as a potential driver of more growth among already booming defense names. "I think what we've seen actually is, if you speak to some of these investors that had previously been restricted, they're no longer restricted, but in order to be able to buy those assets within their funds, they need to update all the fund documents," he explained. "They need to notify their clients what they're planning on doing. So we actually did some benchmarking of the flow situation a couple of weeks ago with our team here. And actually, we don't think that the weighting for ESG funds in Europe has actually shifted that much, which I think is very interesting — we do feel as though a lot of that re-weighting of the European ESG asset basis is still to come." European defense stocks have had a year of blockbuster growth, amid commitments from regional governments and the NATO military alliance — whose members are largely European nations — to drastically ramp up defense spending. The Stoxx Europe Aerospace and Defense index has gained 50% since the beginning of 2025, with the top performers seeing their valuations swell dramatically. Shares of French maritime robotics firm Exail Technologies , for example, have surged 581% over the course of the year. Meanwhile, German defense contractors Renk , Rheinmetall and Hensoldt are up 235%, 164% and 147%, respectively. EXA-FR RHM-DE,R3NK-FF,HAG0-FF YTD line European defense stocks However, regional defense stocks have been selling off over the past three sessions, as a planned meeting between U.S. President Donald Trump and his Russian counterpart Vladimir Putin raised hopes of an end to the Ukraine war. "The reality is, you've seen a lot of hedge funds [and] macro funds being involved in these names. What we've seen over the past month has been a lot of de-grossing. So, some funds have just made a lot of money in the first six months," Bank of America's Heelan told CNBC on Thursday. He added that many defense stocks had recorded massive gains simply on expectations of big orders coming through from regional governments, and suggested that the materialization of those orders may help support the growth story. "The orders in Germany, they're really going to start hitting the backlogs of companies," he said. "So we're in this period where we have very, very high valuations in the short term, because we're expecting this significant trajectory of growth through to the end of this decade."
CNBC
2 days ago
- Business
- CNBC
'Loud luxury' is back as high-end brands look to rebound
"Loud luxury" is poised for a comeback as ailing fashion houses attempt to inject a sense of newness and novelty into their designs to win over weary shoppers. A flurry of new creative directors at brands including Gucci, Chanel and Versace, and the arrival of new Kering CEO Luca de Meo, are seen phasing out "quiet luxury" subtlety in favor of statement styles, in what analysts say could be a turning point for the industry. "We are seeing a shift to a bit more visible luxury at the moment," Carole Madjo, head of European luxury goods research at Barclays, told CNBC's "Squawk Box Europe" last month. "Luxury fashion is a cycle. Now, with quiet luxury being a few years old, you want something else. Back to my novelty, newness thesis: I think this is now the focus." The sartorial shake-up comes as the luxury sector struggles to overcome a series of headwinds, from trade tariffs to soft consumer sentiment, following its Covid-era boom. Ultra-luxe brands Brunello Cucinelli, Hermes and LVMH's Loro Piano have navigated that downturn largely unscathed, as their super-rich clientele continued to spend big on understated couture cashmere and high-end handbags. But for many brands, quiet luxury's discrete opulence, which glided to the fore in 2022 alongside the popularity of shows like HBO's "Succession," no longer cut it. That could herald a new era of large logos, bold branding and distinctive designs dominating catwalks to high streets. "There is no longer the same level of desire for many products across the market, pushing all major brands to change creative direction in search of relevance," Yanmei Tang, analyst at Third Bridge, said via email. One brand owning that shift is Burberry. Under the leadership of CEO Josh Schulman, the company is once again embracing its British heritage image after years of management changes, declining sales and knock-off dupes sullying associations with its eponymous check print and signature trench. Chief Financial Officer Kate Ferry said during a second-quarter earnings call that the company's statement heritage collection, which includes full checkered two-pieces, was "reigniting brand desire" and positioning Burberry among a wide consumer base as "a luxury brand with broad universal appeal." Gucci is seen targeting the same refit under its new artistic director Demna Gvasalia, whose boundary-pushing designs courted controversy at parent company Kering's smaller Balenciaga label. Kering's deputy CEO and brand development lead, Francesca Bellettini, said last week that a "first hint of [Demna's] vision for Gucci" would come in September, with a full rollout of the collection due in early 2026. Fashionistas and investors have long awaited a catalyst to turn around Gucci's fortunes, as sales have suffered, particularly from weaker demand in China. The arrival next month of former Renault chief Luca de Meo as Kering CEO is also set to inject an outsider perspective and branding expertise. "The key thing is to bring back some brand desirability," Madjo said. "Bringing newness — something fresh which has not been seen before — is, I think, what could make Gucci great again." New creative and artistic leads are also seen shaking things up at Chanel, Bottega Venetta and the famously out-there Versace. Moncler, meanwhile, has opted to experiment with rotating designers via its Genius collection, and Prada recently cited image adaptability among the brand's virtues. "What's beautiful about Prada is that it can be sporty, it can be glamorous. This is one of the few brands that can allow us to play three or four games at the same time," group CEO Andrea Guerra said on an earnings call last month. Fashion houses will be hoping that the image overhauls can help inspire waning interest from consumers who became disillusioned with brands after significant pandemic-era price hikes failed to reflect product innovation. According to UBS's Evidence Lab, the price of luxury goods rose by a record 8% on average in 2022, well above the pre-Covid rate of 1% and the 3% recorded this year to May. Only top-end brands Hermes, Rolex and Richemont-owned Cartier have been able to sustain significant price rises in 2025 — though many more have warned that tariffs may force their hand. Gucci, Burberry and Prada, meanwhile, have raised prices, but to a smaller extent. That's likely to propel a further divide between quiet ultra-luxe brands and relatively more affordable labels. Marcus Morris, portfolio manager for European and global growth equities at Alliance Bernstein, told CNBC last week that higher prices could now only be justified by the "right brands, the right brand management and the right marketing of those brands." Nevertheless, more modest pricing strategies may be what's needed for troubled brands seeking to regain market share and compel a broader consumer base. "High-end soft luxury brands have increased their prices a lot," Luca Solca, sector head for global luxury goods at Bernstein, told CNBC. "Brands with a more moderate pricing approach [are] doing well ... potentially going to benefit from this middle ground." Indeed, in a loud luxury era, it could play in their favor. "It could be less of an issue to show off this product, because it is still a bit more affordable, let's say, compared to some other brands," Madjo said.
CNBC
3 days ago
- Business
- CNBC
Big Tech's trillion-dollar market cap club could have a new member in the next few years, Dan Ives says
Palantir is on its way to becoming a trillion-dollar company, according to prominent tech bull Dan Ives. The AI company's stock has surged more than 140% since the beginning of the year. Earnings beats , lucrative military contracts and the firm's CEO boasting about "crazy, efficient revolution" in terms of growing revenue while downsizing headcount, have all helped build buzz around the firm. The firm's shares popped 7.85% on Tuesday, after it reported $1 billion quarterly revenues for the first time, way ahead of analyst expectations. Since then, the stock has extended its gains and was last seen 1% higher in pre-market trading. PLTR YTD line Palantir share price Speaking to CNBC's "Squawk Box Europe" this week, Ives, who is global head of tech research at Wedbush Securities, outlined why he still sees huge upside ahead for the stock. Ives runs the Wedbush AI Revolution ETF, which counts Palantir among its top holdings. Labeling Palantir "the Messi of AI" — a reference to legendary Argentinian soccer star Lionel Messi — Ives said: "I believe this is going to be a trillion-dollar company in the next two to three years." "There's no company that has what they have when it comes to software and use cases, and I think they're exploding across the board," he explained. "And the government … they're really going to take the lead when it comes to AI on the sovereign front, and that's why they're one of our top names, and again, I think a trillion-dollar [market cap] in the next two, three years." Palantir currently has a market cap of around $432 billion, according to LSEG data. In a note on Tuesday, Ives raised his price target for Palantir from $160 to $200, citing "continued hyper growth demand for the company's AI product suite." If the stock achieves Wedbush's new target price, it would mark a 9.8% premium on Thursday's closing price. Earlier this week, Palantir CEO Alex Karp said the firm was "obliterating" the so-called "Rule of 40," a key metric investors use to evaluate potential returns on tech stocks. The metric ranks businesses by evaluating revenue growth and margins, with a score over 40% considered good. According to Karp, Palantir's score is 94%. Ives told CNBC on Wednesday that some investors already saw Palantir stock as overpriced, but warned that this approach could lead to missing out on the company's growth trajectory. "If you focus just on valuation, you missed every transformational tech stock the last 20 years," he said. "Many investors, they've hated [Palantir shares] at $20, despised it at $50, [been] screaming from the mountaintops at $100, $150, [but] they're revolutionizing tech." — CNBC's Alex Harring contributed to this article.
CNBC
3 days ago
- Business
- CNBC
Trump's Russia deadline comes around with tariffs at stake
U.S. President Donald Trump's deadline for Russia to cease its war in Ukraine expires on Friday, as markets watch whether the White House will proceed with steep penalties on Moscow's oil clients. Increasingly frustrated with the Kremlin, Trump has pledged "secondary tariffs" of "about 100%" on Russia's trade partners, if Moscow does not end its invasion in Ukraine, setting an initial 50-day timeline that was later shortened. Trump has made ending the war in Ukraine a key foreign policy objective of his second presidential mandate, reversing course on an initial thawing of White House relations with Moscow to now pile on pressure on the Kremlin for the lull in diplomatic progress. At the heart of Russia and Ukraine's inability to strike a ceasefire to date have been differences over Putin's maximalist demands that the war can only end if Kyiv gives up its ambitions to join the NATO military alliance and if Moscow retains four Ukrainian regions annexed during the latest conflict. Russia also seeks a final conclusion to the war and has previously called for new elections in Ukraine. Earlier in the week, U.S. Special Envoy Steve Witkoff travelled for an eleventh-hour meeting with Putin, which Trump hailed as "highly productive." "Everyone agrees this War must come to a close, and we will work towards that in the days and weeks to come," he said Wednesday. Trump's optimism appeared to have dwindled by Thursday, despite suggestions that the U.S. president could meet his Russian counterpart over the coming days. Asked Thursday whether he stood by the Friday deadline to Russian President Vladimir Putin, Trump said, "We're going to see what he has to say. It's going to be up to him. Very disappointed." At risk for Russia is the potential dissolution of its scant remaining client base for its crude and oil products volumes, which countries within the G7 are no longer permitted to take on a seaborne basis. Under a G7 scheme, nations outside of the coalition retain critical access to Western shipping and insurance mechanisms as long as they only purchase Russian supplies under a price cap. Russia's sanctions-sapped economy heavily depends on its crude sales, amid increasing isolation on the international stage and dwindling growth expected near 1.4% this year, from 4.3% in 2024, according to the World Bank's June forecasts. If it presses ahead, the introduction of the so-called secondary tariffs and Trump's increasingly heated rhetoric would in turn strand Moscow's buyers with a choice between continuing with cheap oil purchases or engaging with the U.S. on favorable trading terms. A first use of U.S. secondary tariffs is set to come in place on Aug. 27 by way of an additional 25% in duties for frequent Russian oil consumer India. "It's very significant that Trump has decided, though, to turn up the heat on his friend Narendra Modi in India, and not on Putin himself," Tina Fordham, founder of Fordham Global Foresight, told CNBC's "Squawk Box Europe" on Friday. "It tells us, really, that President Trump is very reluctant to actually put the pressure directly on Putin. And so much so he's willing to jeopardize this relationship with India, which is a hugely important ally within the wider context of U.S.-China relations."
CNBC
4 days ago
- Business
- CNBC
UAE, Russia laud relations, pledging to double trade
Russian President Vladimir Putin hosted his UAE counterpart, President Mohammed bin Zayed Al Nahyan in Moscow on Thursday, with the countries pledging to double trade over the next five years. CNBC's Natasha Turak has been covering the relationship between the two nations and joins Squawk Box Europe with the details.
