Luxury stocks surge as Trump's Davos comments lift European shares
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European markets reached new heights on Friday, with the STOXX 600 hitting a record high as luxury goods stocks rallied and investors welcomed U.S. President Donald Trump’s calls for lower interest rates. The pan-European index gained 0.4% as of 08:11 GMT, following its previous session’s all-time closing high.
Luxury sector leads the charge
Personal and household goods stocks drove the market’s upward momentum, climbing 1.6%. British luxury giant Burberry surged 14% after reporting a smaller-than-expected 4% decline in quarterly comparable store sales, defying market fears. Other luxury brands followed suit, with LVMH rising 3.2% and Gucci’s parent company, Kering, advancing by 8%.
Mining stocks also performed strongly, gaining 2.1% as rising metal prices boosted the sector. These gains underscored the breadth of investor confidence in Europe’s diverse markets.
Trump’s comments buoy sentiment
In a video address at the World Economic Forum in Davos, Trump called for immediate interest rate cuts and urged other nations to adopt similar policies. This dovish tone from the U.S. president further fueled optimism among European investors.
Additionally, Trump hinted at progress on a potential trade agreement with China, which could alleviate lingering trade tensions and support global economic growth. Markets interpreted the absence of immediate tariff announcements as a positive signal, with Euro STOXX 50 futures rising 0.4%.
Key earnings and data in focus
The day’s gains came alongside mixed corporate results. Burberry’s standout performance contrasted with Ericsson’s 8.4% drop following disappointing fourth-quarter earnings. Meanwhile, Italy’s Monte Paschi announced a bold €13.3 billion takeover bid for Mediobanca, signaling continued consolidation in the banking sector.
Investors also awaited eurozone flash PMI data for January, which will provide critical insights into the region’s economic health. These figures, along with upcoming earnings from major companies like LVMH, Novo Nordisk, and SAP, will shape market sentiment in the weeks ahead.
Outlook for European markets
As earnings season unfolds and geopolitical uncertainties persist, European stocks appear well-positioned to maintain their upward trajectory. Luxury stocks remain a key driver, benefiting from resilient consumer demand and robust corporate performance. However, market volatility may resurface as global leaders address critical economic and trade policies in the weeks to come.
Luxury sector leads the charge
Personal and household goods stocks drove the market’s upward momentum, climbing 1.6%. British luxury giant Burberry surged 14% after reporting a smaller-than-expected 4% decline in quarterly comparable store sales, defying market fears. Other luxury brands followed suit, with LVMH rising 3.2% and Gucci’s parent company, Kering, advancing by 8%.
Mining stocks also performed strongly, gaining 2.1% as rising metal prices boosted the sector. These gains underscored the breadth of investor confidence in Europe’s diverse markets.
Trump’s comments buoy sentiment
In a video address at the World Economic Forum in Davos, Trump called for immediate interest rate cuts and urged other nations to adopt similar policies. This dovish tone from the U.S. president further fueled optimism among European investors.
Additionally, Trump hinted at progress on a potential trade agreement with China, which could alleviate lingering trade tensions and support global economic growth. Markets interpreted the absence of immediate tariff announcements as a positive signal, with Euro STOXX 50 futures rising 0.4%.
Key earnings and data in focus
The day’s gains came alongside mixed corporate results. Burberry’s standout performance contrasted with Ericsson’s 8.4% drop following disappointing fourth-quarter earnings. Meanwhile, Italy’s Monte Paschi announced a bold €13.3 billion takeover bid for Mediobanca, signaling continued consolidation in the banking sector.
Investors also awaited eurozone flash PMI data for January, which will provide critical insights into the region’s economic health. These figures, along with upcoming earnings from major companies like LVMH, Novo Nordisk, and SAP, will shape market sentiment in the weeks ahead.
Outlook for European markets
As earnings season unfolds and geopolitical uncertainties persist, European stocks appear well-positioned to maintain their upward trajectory. Luxury stocks remain a key driver, benefiting from resilient consumer demand and robust corporate performance. However, market volatility may resurface as global leaders address critical economic and trade policies in the weeks to come.