Jul 14, 2026 · 5 min
Supply pressures and US demand split European market performance
Ericsson Plunges, Watches of Switzerland Jumps, BP Gains
Understanding these divergent corporate updates reveals how localized supply chain pressures and regional consumer strength are actively reshaping European stock valuations.
- 1Ericsson shares hit an 18-month low due to component cost inflation and memory chip supply constraints.
- 2Watches of Switzerland bypassed slowdowns in China and the Middle East through strong sales in the United States.
- 3BP stock rallied over 3% after second-quarter net debt fell below market expectations.
Don't miss
Louise Moon breaks down the specific supply chain bottlenecks and memory chip constraints dragging down Ericsson's network margins.
The brief
European markets are navigating a sharp divergence in corporate fortunes as supply chain bottlenecks, resilient American consumer demand, and shifting debt profiles redraw the map for major regional players.
Swedish telecoms giant Ericsson suffered its worst stock drop in 18 months, driven by projected margin pressures in its networks unit as memory chip shortages and rising component costs squeeze profitability.
Conversely, luxury retailer Watches of Switzerland surged on a 13% annual revenue boost, insulated from broader global slowdowns in China and the Middle East by a powerful wave of demand in the United States.
Energy giant BP also found footing, gaining over 3% after its second-quarter net debt undershot expectations and improved refining margins provided a stronger-than-expected financial buffer.
What was said on this episode
7 statements · 4 positive · 3 negative
Ericsson’s margin pressures may extend into 2027.
“what will happen in 2027, for example, on the back of this”
Listen at 1:02
Weak phone-company demand is a headwind for Ericsson’s 5G networks business.
“weak demand from phone companies for these 5G networks.”
Listen at 1:33
Watches of Switzerland revenue rose 13%, led by strong US demand.
“revenue up 13% led by predominantly by the US so a lot of demand, good sales in the US”
Listen at 2:01
Watches of Switzerland expects revenue to increase another 10% this financial year.
“They also expect revenue to boost another 10% in the current financial year.”
Listen at 2:11
Watches of Switzerland has limited exposure to the Middle East conflict and Chinese market.
“they don't have much exposure to the Middle east conflict and to the Chinese market.”
Listen at 2:20
BP’s second-quarter net debt was below expectations and lower than the prior quarter.
“net debt undershoots expectations and it's lower than the previous three months.”
Listen at 3:30
BP expects another $1 billion write-down from its oil-and-gas pivot.
“BP are expecting to write down another US$1 billion from their pivot towards oil and gas.”
Listen at 3:58
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Featuring
Watches of Switzerland
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