Weakest quarter for luxury goods may be behind us - BofA
STOXX 600 down 1%, volatility spikes
US-Russia tensions rise over Ukraine
Nestle to cut costs by $2.8 billion
Wall St futures inch lower
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
WEAKEST QUARTER FOR LUXURY GOODS MAY BE BEHIND US - BOFA
The weakest quarter for luxury demand might have passed, according to Bank of America equity strategists, who nevertheless say revenues are likely to remain challenged or negative through the first half of next year.
European luxury names .STXLUXP are down 2.9% this year as demand has stagnated, particularly in China, while the broader market is up 4.1%
BofA says sector revenues for luxury goods came in at -3% in the third quarter - in other words, one of the biggest declines ever recorded excluding COVID.
"Data we track suggests that luxury demand has slightly improved in Oct, but we think it's too soon to say that tough trading is behind us," writes the BofA team.
"Whilst top-down pressure on the consumer will ease, more fashion content, newness and branded product is required to re-engage consumers and drive a recovery in traffic and volumes," they write, looking ahead to the first half of 2025.
The improvement in October came from China and the U.S., while Japan continued to slow, they add.
Zooming in to China demand, it's more a case of "less bad" than anything good.
"In 4Q so far, China retail sales improved in Oct (+5%, from +3% in 3Q), and China jewellery sales were flat (from -8% in 3Q)."
In the U.S., luxury spending was -5% in October, from -8% in the third quarter.
(Lucy Raitano)
*****
FOR TUESDAY'S OTHER LIVE MARKETS POSTS
"DON'T GIVE UP ON EUROPE," SAYS UBS CLICK HERE
AUTOS AND BANKS DENT STOXX, RUSSIA WORRIES MOUNT CLICK HERE
EUROPE BEFORE THE BELL: POSITIVE START IN STORE CLICK HERE
TRADERS FOCUS ON FED AS KEY TRUMP PICKS AWAITED CLICK HERE
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
