L'Oreal Falls, Kongsberg Sees Air Defense Systems Demand Growing | The Opening Trade 2/13/2026
Watch on YouTube ↗  |  February 13, 2026 at 11:57 UTC  |  1:12:01  |  Bloomberg Markets
Speakers
Guy Johnson — Anchor, Bloomberg
Tom Mackenzie — Anchor, Bloomberg
Paul Dobson — Executive Editor for Asia Markets, Bloomberg
Paul Thwaite — CEO, NatWest Group
Alaa Busada — Head of Fixed Income, BNY Investments (Newton)
Oliver Crook — Chief European Correspondent, Bloomberg
Geir Håøy — CEO, Kongsberg Defence & Aerospace
Fabiana Fedeli — CIO of Equities, Multi-Asset and Sustainability, M&G Investment Management
Louise Moon — Reporter, Bloomberg
Andreas Kubilius — EU Commissioner for Defence and Space

Summary

  • The "Karaoke" AI Scare: A massive disruption narrative has hit the market where a former karaoke company ("Algorithm Holdings") pivoted to AI logistics, causing a panic sell-off in traditional logistics stocks (down ~7%). The market is pricing in AI displacement of labor-intensive sectors (logistics, legal, software).
  • Defense Sovereignty: The Munich Security Conference highlights a structural shift. Europe is moving toward "sovereignty" and independent nuclear deterrence, decoupling from US reliance. This is driving order books for air defense and space capabilities.
  • Semiconductor Bifurcation: While software and logistics panic, semiconductor equipment (the "enablers") are surging. Applied Materials (AMAT) posted strong guidance, lifting the sector (ASML), confirming that AI capex is real even if software winners are unclear.
  • Luxury & Consumer Weakness: L'Oreal posted its biggest drop since 2020 due to competition from North Asian (Korean/Chinese) beauty brands and travel retail weakness, signaling a structural loss of moat for legacy western luxury in Asia.
Trade Ideas
Ticker Direction Speaker Thesis Time
LONG Fabiana Fedeli
CIO of Equities, Multi-Asset and Sustainability, M&G Investment Management
Applied Materials (AMAT) surged 10% on upbeat sales forecasts driven by demand for AI and memory chips. Capgemini is pivoting to "sovereign AI" infrastructure. The market is struggling to pick winners in software ("losers" are being sold off), but the "enablers" (hardware and infrastructure) have clear visibility. Capgemini benefits from the specific European push for "sovereign" AI and IT independence. LONG. Focus on the "picks and shovels" (Enablers) rather than the software applications which are vulnerable to disruption. Overvaluation in the semi-equipment space if AI capex slows. 22:32
LONG Geir Håøy
CEO, Kongsberg Defence & Aerospace
Kongsberg sees high demand for air defense (NASAMS) and anti-drone systems. Safran raised 2026/2028 guidance. The "Greenland Moment" and Munich Security Conference rhetoric confirm Europe is building "sovereign capabilities" independent of the US. This is a structural increase in spending on air defense, space, and aftermarket services (Safran/Rolls-Royce). LONG. Defense is decoupling from the general economic cycle due to geopolitical necessity. Supply chain bottlenecks (rare earths, chips) limiting delivery capacity. 35:21
SHORT Guy Johnson
Anchor, Bloomberg
A small AI company ("Algorithm Holdings") disrupted the sector, causing a "scare trade" where logistics stocks fell ~7%. The market is in a "manic" phase, pricing in the obsolescence of labor-intensive business models (logistics, trucking) due to AI efficiency. Investors are dumping "human-heavy" cost structures. SHORT / AVOID. Sentiment is currently "Category 5 paranoia" regarding AI displacement in logistics. The sell-off is an overreaction to a single news story (the "karaoke company" pivot), leading to a sharp mean reversion bounce. 42:50
SHORT Tom Mackenzie
Anchor, Bloomberg
L'Oreal shares dropped ~6-7% (biggest since 2020) following a Q4 earnings miss. The weakness is driven by North Asia (China/Korea), where local "C-Beauty" and "K-Beauty" brands are taking market share, and travel retail is slumping. This suggests a structural erosion of the Western luxury brand premium in Asia. SHORT. The "China reopening" trade for luxury is dead; local competition is the new reality. Chinese stimulus measures could temporarily boost consumer discretionary spending. 17:18
SHORT Tom Mackenzie
Anchor, Bloomberg
DraftKings (DKNG) issued a weak outlook; Flutter fell ~8% in sympathy. The sector is facing disruption from "prediction markets" and potentially changing consumer habits. The market is swiftly repricing growth expectations downwards. SHORT. Momentum has broken, and regulatory/competitive headwinds are intensifying. M&A activity in the sector could squeeze shorts. 45:38
XAU
LONG Alaa Busada
Head of Fixed Income, BNY Investments (Newton)
Gold dropped recently but remains near $5,000/oz. China is signaling a reduction in US Treasury holdings. Structural diversification by central banks (specifically China) away from US Treasuries creates a permanent bid for hard assets like Gold. The "scare trade" and geopolitical instability (Munich conference) reinforce the safe-haven status. LONG. Buy the dip (recent 4% drop) as the structural trend remains intact. A sharp rise in real yields if inflation data surprises to the upside could temporarily hurt gold. 0:32
LONG Paul Thwaite
CEO, NatWest Group
NatWest beat earnings estimates (profit 1.94bn vs 1.72bn exp) and acquired Evelyn Partners (Wealth Management). The bank is capitalizing on the "green shoots" in the UK economy and consolidating the wealth management sector. The acquisition doubles their assets under management in a fee-based business, reducing reliance on net interest margins. LONG. Strong execution and strategic M&A in a recovering UK macro environment. UK GDP disappointment or political instability ahead of elections. 8:54