Episode summary
BI Weekend: Luxury, Railroad, and Machinery 2026 Outlook | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Deborah Aitken, Jonathan Goldstein, Lee Klaskow, John Butler, Nathan Naidu, Christopher Ciolino, Bill Keenan
Summary
Luxury goods makers enter 2026 with improving China demand, but the recovery depends on only modest price increases and a return to volume growth. The analyst said 2025 ended with about 3% to 4% growth, helped by resilient U.S. demand and improving signals from China, while high-end brands have been able to pass through tariff-related price increases more easily than lower-end players. She argued that the strongest luxury names, especially in handbags and top-tier fashion, still retain pricing power and investment value, while more affordable aspirational brands have faced a tougher environment.
The rail outlook is constructive but not strong, with North American earnings expected to rise in the mid-single digits to high single digits in 2026. The analyst said demand should stay tepid, tariffs are creating uncertainty for shippers, and Union Pacific’s proposed Norfolk Southern deal faces a difficult regulatory path. Telecoms are shifting toward broadband and satellite as wireless growth slows, with price competition likely to intensify as Verizon and AT&T chase subscribers. Cloud gaming, meanwhile, is moving toward mobile and cloud delivery, with network latency the key hurdle.
US machinery looks closer to an inflection point, led by construction equipment and power generation, while agricultural equipment remains weak and likely falls again in 2026. The episode also highlighted Jonathan Goldstein’s sports investing logic around cricket and Chelsea, and Bill Keenan’s argument that Bull Run captures the absurdity of Wall Street more than its corruption.
Key takeaways
- The luxury analyst expects 2026 recovery to rely on limited price increases and stronger volume growth, with China showing "green shoots" late in 2025.
- North American rail earnings should improve in 2026, but the analyst expects only mid-single-digit to high-single-digit growth, not double digits.
- The rail analyst gave Union Pacific’s Norfolk Southern deal only a 40% to 45% chance of closing, citing a high regulatory bar.
- The telecom analyst expects more wireless promotion in 2026 and sees broadband and satellite as the main growth engines.
- The machinery analyst sees US machinery approaching an inflection point, but expects North American farm equipment sales to fall another 10% to 15% in 2026.
- The cloud gaming analyst said mobile and cloud delivery could gradually make consoles niche devices for hardcore players.
Notable quotes
“the recovery of luxury goods makers in 2026 hinges on limited price increases and a shift toward volume growth”
“we think into 2026 that moves nearer to 2 to 3% overall. So it should be less intimidating for the consumer overall 2026”
“We are thinking that next year is going to be a better year, but it's not going to be a great year”
“We believe that the US machinery uh earnings are likely approaching a inflection point in 2026 really after a multi-year downturn”
How the episode opens
Bloomberg Audio Studios podcasts, radio news. This is Bloomberg Intelligence — With Scarlett Fu and Paul Sweeney. — How do you think the Fed is looking at tariffs, the uncertainty of tariffs? — Let's take a look at the sectors and how they perform.
A lot of investors getting whipsawed every day by news events — Breaking market headlines — And corporate news from across the globe. — Could we see a market disruption, a market event? Are people just too exuberant out there? — You see some so-called lowquality stocks driving this short-term rally. Bloomberg Intelligence
With Scarlet Fu and Paul Sweeney — On Bloomberg Radio, YouTube, and Bloomberg Originals. — On today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. — Each and every week, we provide in-depth research and data on some of the 2,000 companies and 130 industries our analysts cover worldwide. Today, we'll look at the outlook for US railroad transportation, telecoms, and cloud computing business for 2026.
Plus, we speak with the writer and producer of the film Bullr Run on capturing the excess and high octane world of Wall Street. — But first, we lean into the world of luxury. According to the most recent Bloomberg Intelligence Research, the recovery of luxury goods makers in 2026 hinges on limited price increases and a shift toward volume growth.
For more, Paul and guest host Nor Melinda spoke with Deb Akin, Bloomberg Intelligence luxury goods analyst. We started out 2025 with an expectation that we'd move back to growth and that certainly didn't materialize through the first half of the year but we seem to be ending at around 3 to 4% growth as we exit 2025. Now the US has been robust uh Middle East doing very well but it particularly in the first half the year it was China which was the drag and what we've noticed as we end the year uh we've actually just heard um on a fireside chat over the last few days from L'Oreal where they're mentioning high-end beauty doing very well out of the US uh but also in China too.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- luxury goods outlook 2026
- sports investing
- north america railroads outlook 2026
- us telecom and satellite outlook 2026
- cloud gaming outlook 2026
Companies and tickers mentioned
- Bloomberg L.P.
Watch the episode
Watch “BI Weekend: Luxury, Railroad, and Machinery 2026 Outlook | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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