Luxury assets had one of their best weeks of the year during December 13-20. The FSW Markets Market All Luxury Index closed up almost six percent. Gainers heavily outweighed losers as 13 of the index’s 18 constituents had positive simple returns during the week: Brunello Cucinelli was up over 7 percent and Zegna, which has had a generally poor 2024, was up over 6 percent. Capri Holdings Limited took the biggest fall of the week, down over 4 percent, amid speculation that they will look to unload Versace and Jimmy Choo after their failed attempt to link up with Tapestry.
But this was an outlier week for the industry, particularly in H2, as the FSW Index is down 5.8 percent year-to-date. This is compared to a nearly 27 percent positive return for the S&P 500, 10 percent gain for the Euro Stoxx 50, and a 15 percent gain for the S&P 500 SPDR Retail ETF (XRT).
Looking towards the week ahead, the Federal Reserve is expected to cut rates by a further 25bp on December 18 as it continues to move policy from restrictive territory to somewhere closer to neutral. We will also see China and U.S. November retail sales released (expected to be fairly flat).