If you look at this image of luxury store Louis Vuitton stormed by protesters, what do you think?
Is it game over for LVMH, the world’s largest luxury retailer…
Or is it another case of the media being obsessed with the wrong story?
Source: Bloomberg
If you have followed my analysis so far, you may know the answer.
But here’s the background: Infuriated French protesters are out in the streets fighting the French government’s new pension reform.
They’re trying to raise the retirement age in the country from 62 to 64 years old… a very unpopular idea.
So… they decided to attack the country’s symbols of capitalism and luxury.
And it appears LVMH, the world’s leading luxury brand, is receiving the brunt of it.
LVMH – Moët Hennessy Louis Vuitton – controls about 60 subsidiaries which manage 75 luxury brands like Dior, Sephora, Tiffany & Co, Givenchy, Marc Jacobs, Tag Heuer, and many more.
And a couple of weeks ago, founder Bernard Arnaud saw his net worth cross $200 billion to become the world’s wealthiest person.
And this is the real story…
LVMH Proves There’s No Recession
Mr. Arnaud’s wealth is tied to his ownership of the luxury conglomerate, and its share price jumped after it reported blowout earnings.
Most of the growth was driven by China, where consumers are no longer experiencing tight lockdowns.
The country has rolled back its “zero Covid” policy and Chinese consumers are splurging on luxury goods hand over fist.
Neither inflation nor the general market jitters are preventing this.
Consumers are out there, and they are willing to spend.
And not only in China…
Unstoppable Consumer Activity in the U.S.
While the mainstream media in the U.S. had its readers fixated on the “banking crisis,” the largest banks in the United States are publishing excellent quarterly results.
The Bank of America reported a 15% growth in profits compared to the same quarter of 2022.
(Wall Street analysts, by the way, predicted that BoA’s profits would decline.)
The bank’s CEO said on the earnings call:
The forecast is for a recession in the second half of the year, but we don’t see consumer activity slowing to a pace that indicates that. Everything points to a mild recession, but we will see what happens.
Unstoppable consumer activity tells me that a recession isn’t going to happen anytime soon.
The bank’s CEO is being cautious… and I understand that. But if you read between the lines and shut out the noise, this statement is overwhelmingly positive.
However hard the media tries to persuade you otherwise, my 18.6-year real estate cycle – which has helped me navigate global markets for decades – suggests no recession soon.
And I see proof of that coming from pretty much everywhere in the world.
So who should you listen to? That’s for you to decide.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
P.S. I know it’s hard to believe, but saying anything else would be less than the truth – I’ve called every major market move over my 30-year career.
And this lets my readers navigate markets with calm and confidence.
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