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Let's take a look at some of the stocks on the move today. Then in Europe, I'm Caroline Hepgar with Valerie Title and we're joined by Binberg reporter Chloe Malay.
Good morning.
So automation and robotics in focus. Firstly, Schneider Electric. There's been a bullish view from JP Morgan. Does the market agree It seems like they do so.
Schneider Electric shares were up this morning, as well as Semen's Energy, so both of those companies were upgraded by JP Morgan analysts, with those analysts saying that they have a really bullish view on the European capital goods sector going into twenty twenty six. They said that the sector setup is the best that it has been for quite a few years, and that is thanks to the sector's
exposure to areas where there's a lot of momentum. So of course we're thinking about a power generation grid, expansion data centers. Of course, with this AI story that is continuing, there's also improvement in European PMIS, and so that's also helping out higher metal prices and improving outlook in China.
Also the boost from the German fiscal stimulus that is going to come through next year, so all of those factors are essentially reunited for a good twenty twenty six for that sector, and Schneider Electric and Semen's Energy are set to be better fitling from that.
In particular, Semen's Energy, the expectator.
Of the particularly high Daena list said that the earnings growth is casting shade on the rest of the coverage. So there's also good freak cash flow potential through to the twenty forties. So it is quite the price for Semen's Energy and therefore we're seeing those two companies rising this morning.
Well, let's shift to the auto sector because in the US session yesterday some of these autos were flying on the back of some helps around deregulation when it comes to Trump administration. We're seeing a positive session here in Europe today, Mercedes on the back of an upgrade.
Yeah, Mercedes also and also Porsie were always at Bank of America, so there's really a vote of confidence in that car making sector after what has been quite a few setbacks.
Of course this year.
We had of course US tariffs that are really weighing on that industry, but also really continued competition in China where those European car makers are really struggling to maintain market share against Chinese manufacturers, and then also slow down in the electric vehicle market. So there were a lot of different challenges for that industry this year. But it seems that things might be turning around for the sect and as you mentioned, we have those news of deregulation
boosting those stocks as well. We've also now got more clarity on tariffs. We also have signs that ev demand for affordable models specifically is also picking up in Europe, so it seems to be doing better. The main problem that we're going to have next year for that sector is going to be those competitive pressures in China that
are expected to steal be there and city analysts. Just yesterday I actually cut some earnings estimates for BMW and Mercedes in particular because of that continued weakness in China.
So there's just one negative spot there.
Okay. We're keeping it on on what's going on in European stocks and especially positive EU stocks st Micro. What is driving that progress?
So sc Micro, but also other kind of chip names like ASM, etc. Up this morning on this kind of optimism around the AI trade at the moment. We had that going on as well yesterday with some upbeat commentary bullish commentary from companies like Marvel and Microchip. We also have some read across today from a camera con saying that it will triple the production of AI chips in twenty twenty six.
So those chip stocks in Europe have.
Gone kind of up and down throughout the last few weeks as fears of an AI bubble kind of come back and retreat and then resurface again. But right now there seems to be actually quite positive as sentiment. Perhaps it's only a matter of time for the market starts to worry again about how much money is being spent on those AI investments, but for now it's quite a bullish positive view and st micro is benefiting from that.
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