LVMH Moet Hennessy Louis Vuitton posted sales below analysts’ expectations for the third quarter as the luxury-goods industry grapples with inflation and high interest rates that are squeezing consumer spending. The world’s largest luxury goods conglomerate said Tuesday that sales climbed to 19.96 billion euros ($21.09 billion) in the three months to the end of September, up 9% on an organic basis from the previous year. Analysts had forecast sales of EUR20.48 billion, according to FactSet.
LVMH’s core fashion and leather-goods division contributed EUR9.75 billion to total revenue, with sales up 9% organically. Selective retailing, the unit that houses Sephora, posted a 26% increase in revenue, while perfumes and cosmetics and watches and jewelry fared less well, with sales up 9% and 3% respectively. Wines and spirits is the only business unit that recorded lower sales, with a 14% contraction. After years of strong results fuelled by a surge in demand for luxury goods, the industry is grappling with slowing sales growth globally as customers reckon with inflation and high interest rates, particularly in the U.S. Still, despite the industry slowdown, UBS analysts believe LVMH remains attractive in the long term. “We continue to believe its best-in-class brand portfolio, the sound fundamentals of the industry and its pricing power in an inflationary environment still position LVMH as one of the best stocks to own,” they wrote in a note to clients. The LVMH share, which is listed in the EuroStoxx 50 index within the euro zone, fell by a good three per cent in the after-hours trading on Tradegate.

The Swiss stock market ended trading on Tuesday on a positive note. The SMI improved by 1.7 per cent to 11,002 points, closing above the 11,000 mark for the first time since the end of September. All 20 SMI stocks saw an upward trend at the end of the trading session. A total of 16.89 (Monday: 16.11) million shares were traded. Among the individual stocks, especially cyclically sensitive values were sought after. The shares of Richemont, Givaudan and Holcim led the SMI winners' list with premiums of between 3.1 and 3.9 per cent. UBS shares were up 1.4 per cent. The European banking index improved by 2.4 per cent. On Friday, major US banks JP Morgan, Citigroup and Wells Fargo will present their quarterly results. Interest income could have risen by almost ten per cent year-on-year. The stocks of the defensive index heavyweights Roche, Novartis and Nestle, which had supported the market the previous day, now trailed the overall market slightly with gains between 0.7 and 1.9 per cent respectively.

The European stock markets rebounded strongly on Tuesday, following a session weighed down by geopolitical risks, thanks to the accommodating comments by several Federal Reserve (Fed) officials on Monday. The Stoxx Europe 600 index gained 2% to 452.5 points. In Paris, the CAC 40 and SBF 120 also climbed 2% each, as did the DAX 40 in Frankfurt. London's FTSE 100 advanced by 1.8%. Euroapi shares plunged 59%, as the active pharmaceutical ingredients manufacturer issued a warning about its 2023 results and suspended its medium-term targets. Voltalia (+8.6%) and Eutelsat (+7.8%) were buoyed by the fall in rates on the bond market, while investors were concerned about the two groups' major investment projects. Specialist retailer Fnac Darty (+7.4%) obtained a favourable ruling from the Court of Appeal in London in the litigation surrounding the sale of Comet Group Limited in 2012. Video games publisher Ubisoft lost 5% on the back of a disappointing response from gamers to its flagship title "Assassin's Creed Mirage". Brazilian asset management company BWGI is to acquire a stake in Elis (+4.8%) by buying out Crédit Agricole Assurances' 6% stake. Airbus (+2.1%) delivered 55 aircraft in September and 488 aircraft in the first nine months of the year.

Stocks rose for a third straight session and bonds had their best day since August, after optimism built that the Federal Reserve’s campaign to raise interest rates is winding down. The S&P 500 rose 0.5%, while the Nasdaq Composite gained 0.6%. The Dow Jones Industrial Average advanced 0.4%, or 135 points. Ten of the S&P 500’s 11 sectors rose, after all 11 closed higher on Monday. PepsiCo shares rose 1.9% after the company reported earnings that topped Wall Street expectations. Several major companies, including JPMorgan Chase, Delta, UnitedHealth Group, Domino’s Pizza and Wells Fargo are slated to report results later this week. Deliveries of Boeing aircraft (+2.7%) slowed sharply in September as the US aircraft manufacturer continues to grapple with a series of difficulties relating to the production of its 737 MAX. Unity Software (+1%) announced on Monday the departure of its CEO, John Riccitiello. US carmaker General Motors (+1.6%) reported that it had reached a new pay deal with some 4,300 Canadian employees to end a strike that began on Tuesday morning. US bank Truist Financial (+6.7%) is negotiating the sale of the remaining 80% of its insurance brokerage business to private equity firm Stone Point for 10 billion dollars, the news website Semafor reported on Tuesday. Stone Point already acquired 20% of this business in February and is discussing the purchase of the remaining capital, according to Semafor, citing anonymous sources.

In Asia, major indexes broadly closed with gains on Wednesday. The South Korean stock market stands out among the region's stock exchanges with a plus of 2.3 per cent. Index heavyweight Samsung Electronics boosts the leading Kospi index. The Samsung share advanced by almost 4 per cent after the group presented convincing preliminary figures for the third quarter. The company's operating profit fell year-on-year but increased compared to the second quarter of this year. The Nikkei 225 index advances 0.8 per cent in Tokyo. In Hong Kong, the Hang Seng Index is up 1.4 per cent. In Shanghai, the Composite Index climbs 0.2 per cent.

Long-dated U.S. government debt yields finished sharply lower on Tuesday, with the policy-sensitive 2-year rate ending at its lowest level in more than a month, as fed funds futures traders priced in a high likelihood that the Federal Reserve will not raise interest rates again. The 10-year Treasury note yield fell by 13 basis points to 4.651%. The 2-year Treasury note yield eased by 12 basis points to 4.984%.

Target price Givaudan: Bernstein upgrades to CHF 2600 (2500) - Underperform
Rating Adecco: UBS lowers to Sell (Buy) - Target 32.50 (40) CHF.
Target price Georg Fischer: Vontobel downgrades to CHF 70 (75) - Buy

Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.