US Strikes Iran for 10th Day; Burnham Surprises with Chancellor Healey | Daybreak Europe 7/21/2026
Speakers
Tim
— Analyst
Winnie Hsu
— Bloomberg Reporter (Asia Markets)
Summary
Bloomberg Daybreak Europe covers the latest US strikes on Iran, the surprise appointment of ex-defense secretary John Healey as UK Chancellor, and a US threat of 50% tariffs on Canada. Market focus includes a tech-led Asian rebound, oil supply risks, and EU-China trade frictions. Analysts discuss UK defense stocks (BAE, Babcock) as likely beneficiaries of higher military spending, and issue bearish calls on UK housebuilders Taylor Wimpey and Persimmon.
- US launches 10th consecutive day of strikes on Iran; Houthis threaten Red Sea shipping, raising oil supply concerns.
- New UK PM Andy Burnham appoints John Healey as Chancellor, fuelling expectations of increased defense spending.
- Analysts see BAE Systems and Babcock as key winners from a higher UK defense budget.
- UK gilt market shows nerves after Burnham comments on seeking flexibility in fiscal rules.
- US threatens a 50% tariff on some Canadian goods; Canada adopts a wait-and-see stance.
- EU-China trade tensions escalate as European Parliament delegation visits Beijing.
- Asian stocks rebound, led by the chip sector, with Korean export data showing record growth on AI demand.
- Analysts also issue a negative call on UK housebuilders Taylor Wimpey and Persimmon due to high rates and policy uncertainty.
Ideas
UK defense spending boost benefits BAE, Babcock
The surprise appointment of former Defense Secretary John Healey as Chancellor signals a stronger commitment to increasing UK defense spending. The UK's defense investment program was previously underfunded; more money will directly benefit UK prime contractors. BAE Systems is a key contractor on submarines, the sixth-generation fighter, and naval programs, making it a prime beneficiary. JP Morgan sees Babcock as another potential winner. If European defense collaboration expands, BAE would gain even more.
UK housebuilders Taylor Wimpey, Persimmon set to disappoint
The UK housing market is currently weak and further disappointments are likely because interest rates remain high. Additionally, policy uncertainty around possible wealth taxes and local property taxes adds risk. The analyst has two negative focus ideas on the sector: Taylor Wimpey (a builder) and Persimmon (a supplier), both set to underperform.
