Nick Nelson in conversation with CNBC- Squawk Box Europe

Defence, Tech & Global Shifts

ASR's Head of Research, Nick Nelson, joined CNBC’s Karen Tso and Steve Sedgwick to discuss the Europe and Japan markets.

Speaking first with Steve, Nick addressed Europe’s renewed focus on defence spending. While there’s clear momentum, he noted the long-term impact will depend on how that spending is executed. ASR remains cautious on equities as the U.S. economy shows signs of slowing, with more clarity expected in the second half of the year.

The discussion then turned to whether America is “making Europe great again.” Nick reaffirmed ASR’s bullish stance on defense, highlighting the potential multiplier effects, though again, execution will be key.

Later, in conversation with Karen, Nick shared views on the tech landscape. He pointed to the software’s strong profitability and EBIT margins, especially when compared to the more cyclical hardware space. They also explored the outlook for hyperscalers, with rising capex yet limited visibility on returns.

On Japan, Nick noted an improving earnings backdrop and a shift in the yen-dollar dynamic. Still, caution remains for the luxury sector amid potential tariff pressures and signs of a slowdown in Asia.

The interview wrapped with thoughts on how reliable traditional economic indicators are during periods of global stress.