Optimism was building at the back end of last year that incomes were at last rising faster than inflation, policy makers were likely to achieve a soft landing for their economies, and this would open the path to significant interest rate cuts this year.
Bitcoin and other crypto prices have been rising sharply since last summer, and may hit record highs this year.
There are still significant geopolitical tensions, and Chinese growth remains disappointing, but investors were showing confidence in the luxury sector’s resilience through the downturn.
That confidence is being tested in the early weeks of this year.
Burberry shares fell by almost 10% this morning after the brand reported disappointing global sales over the Christmas period and issued a second profit warning since November.
Same store sales were 4% lower, with the Americas 15% down year-on-year and Europe 5% lower.
The same headwinds are driving sentiment in the watch industry.
Swatch Group’s share price has been sliding since March last year, and has lost an additional 6% since January 1.
Richemont stock has followed a similar trajectory and is just over 4% lower since the start of the year.
Even LVMH, which appeared to be defying gravity until the summer of 2023, has seen its share price fall by over 10% year-to-date.
