The first week of April turned out to be basically a carbon copy of the previous one, if anything with maybe even slightly more positive features. Again in our basket of 20 stocks only 3 saw a weekly decline. Since the end of 2018 only 2 are now trading in negative territory
The previous week marked probably the most negative for the luxuy sector in 2019. This segment of the market was significantly impacted by the return of the fears surrounding the global economy. Triggering the sell-off on Friday 22nd (Monday 25thin Asia) were worse than expected European data particularly in France and Germany
Generally speaking the last week was positive for luxury stocks, albeit with some notable exceptions we will talk about in a bit. What has happened in the past few days almost seems like a text-book case of the scenario we outlined in the recent week. As we have mentioned the majority of luxury stocks scored gains well above the general benchmark of their own domestic markets, which is to be expected during risk-on phases
Last week was not an easy one for luxury stocks. As we can see from our chart investors in luxury companies suffered from widespread losses, which spared only a handful of names. In the core segments of the luxury universe retracements in the 1%-2% order of magnitude were common while the biggest losses were recorded in the auto sector.
Currently very few segments of the global equity markets show higher strenght than luxury. In the last week, thanks mostly to the encouraging news coming from China and the US, which appear to be more willing to settle their trade disputes, mrkets have extended their 2019 rally
Generally speaking luxury stocks sprinted ahead in these first few weeks of 2019, with performances that could hardly have been better: with a few exceptions, mostly found in the troubled auto sector (still regarded by investors with a high degree of skepticism), investors have plenty of reasons to cheer
Where are the best luxury picks? Look for the most solid balance sheets and the most prestigious brands
2018 was contradictory and difficult year for luxury. At the same time some valuable and interesting lessons can be learned: as a matter of fact the first part of the year was indeed in general very positive for this segment of the market. Luxury stocks traded higher, along the rest of the market, on the back of an optimistic outlook, prevalent at the time. Notably intense was the rise of luxury giants listed in Paris, during a time when European equity as a whole already showed some cracks. That helped Paris Bourse to a significant over-performance comparing to many European peers