Paris Stock Exchange: Towards a difficult return to normal for luxury?
Despite a weakening at the beginning of the year, the glory of luxury stocks seems to be making a comeback on the Paris stock exchange. In recent weeks the giants of luxury, LVMH, Hermès and Kering have posted results not far from their records and just yesterday, the CAC 40 rose by 0.88%, gaining 50.90 points to 5,860.63 points in the early morning. Hermès gained 0.93% to 934.20 euros, LVMH 1.17% to 545.60 euros and Kering 0.81% to 562.40 euros.
After three improvement sessions, the CAC 40 index fell 0.43% this morning to 5,804.72 points. LVMH follows the trend and loses 0.39% to 541.70 points, Hermès is down 0.32% to 925 and Kering is down 0.49% to 551.30 points. These declines are once again reflected in the tension driven by interest rates, which is hampering investor confidence. Indeed, the end of February was marked by a considerable rise in interest rates on public debts, a phenomenon that originated in the United States but is now spreading to Europe. Investors are therefore wary of a return of inflation.
It should be noted that in the Asia-Pacific zone, Shanghai lost more than 3% this morning, Hong Kong -2.4% and Tokyo -2.1%. Yesterday at the close, the Dow Jones fell 0.39% to 31,270 points and the broad S&P 500 index by 1.31% to 3,819.72 points.
These figures are somewhat disappointing but do not erase the considerable resilience and upward trend that luxury goods have shown this year and the year before. Indeed, JPMorgan praised it in a note published yesterday morning and raised its recommendation on LVMH from Neutral to Overweight and on Hermès from Underweight to Neutral. It remains to Overweight on Kering.
For let’s not forget that since the beginning of the year, LVMH has set its absolute record at 545.2 euros, with a capitalisation of 275 billion euros, which is the highest in the CAC40 but also in Europe.
As for Hermès, it just outperformed the Total share, formerly No. 1 on the stock exchange, by surpassing it on 19 February by more than 10% with a capitalisation above €100 billion (€105 billion).
Let’s hope that the stock market tensions will not last long, especially since doubts about rates have eased since the beginning of March, but “we will still have to remain vigilant in the coming sessions regarding the trajectory of the equity markets”, warns Christopher Dembik, associate director at Berenberg.
Also, the health crisis seems to be easing in the United States: Joe Biden has assured that there will be enough vaccines against Covid-19 for all adults in the country by “the end of May”, and the state of Texas has announced the forthcoming abolition of the requirement to wear a mask and the full reopening of its shops.
Read also > STOCK MARKET : LUXURY AT A GOOD SPEED
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