A roaring week for luxury stocks

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Last week was probably the best so far in 2019 for luxury stocks. It can be seen from our billboard how only on stock in our group managed to record a loss for the past 5 days of trading. More often than not the rest of the bunch clinched gains that were significantly above their respective national benchmarks. With only a few days left into the first half of the year once again the cyclical characteristics of luxury names are on full display. Recently 3 things happened that decisively helped the turnaround of this sector. First of all people walked away from the last Fed meeting with a quasi-promise to start cutting rates in July, then it was Mario Draghi tun to bolster the markets. The Head of the CB in fact hinted at how in the next few weeks additional details concerning the next round of QE will be disclosed. Most of all though it was the rumour about a possible meeting between Xi Jinping and Donald Trump at the next G-20 summit in Osaka, that really sent luxury names through the roof. This sector notoriously is in strong need of free flows of capital and goods with Asia.

Since the end of 2018 only one stock in our top, specifically Tiffany, so far has advanced less than its own national benchmark in terms of YTD. Across the board dispersion remains at a high level with top 8 winners above the 20% threshold in terms of YTD while 6 out of 20 companies are still in the red. In the latter segment all the companies, except maybe Tesla, are experiencing a significant pickup in investors interest, particularly Prada is doing well on the back of the ongoing Asian markets renaissance. Last but not least earnings season is about to kickoff: presented with encouraging results it wouldn’t be surprising if investors rotated a bit into some under-performing names. On the other hand luxury star names are not exactly cheap: any hint of dismal numbers emerging from quarterly figures could actually trigger a new bout of higher volatility.

Azienda Performance YTDBorsa 
Ferrari65.07%Milanoup
LVMH 42.64%Parigiup
Estee Lauder 39.36%New Yorkup
Christian Dior35.97%Parigiup
Hermes 32.13%Parigiup
Richemont 30.83%Zurigoup
Moncler 29.31%Milanoup
Kering25.41%Parigiup
Ferragamo19.37%Milanoup
Tifffany16.28%New Yorkup
Ralph Lauren13.84%New Yorkup
Porsche 12.32%Francoforteup
Tod's11.48%Milano down
Burberry2.74%Londraup
Prada-1.74%Hong Kongup
Brunello Cucinelli-2.67%Milanoup
Tapestry/Coach-7.17%New Yorkup
Capri/Michael Kors-8.49%New Yorkup
BMW-8.15%Francoforteup
Tesla -33.34%New Yorkup

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