European equities eye eighth weekly gain as luxury stocks shine
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STOXX 600 Holds Near Record Highs as Luxury Outperforms
European stocks are pausing after a strong rally but remain on track for their eighth consecutive weekly gain, marking the longest winning streak since March 2024. The STOXX 600 is down 0.1%, but bullish sentiment remains intact, with the index closing at record highs for the past four sessions. Luxury stocks are leading the charge, with Hermès jumping 4.2% after reporting an 18% surge in Q4 sales, underscoring resilient demand for high-end fashion and accessories. Burberry, Richemont, LVMH, and Kering are also in the green, pushing the European personal goods index up 1.1%.
Luxury Outshines Broader Market Amidst Sector Divergence
The luxury sector continues to be a bright spot in European equities, benefiting from strong pricing power and demand from ultra-wealthy consumers. The latest results from Hermès reaffirm the sector’s resilience, despite macroeconomic concerns and shifting consumer sentiment in mass-market retail. In contrast, healthcare stocks are under pressure, with Fresenius Medical Care falling 6% after U.S.-listed DaVita issued a weak profit outlook, sending its shares down 11% in after-hours trading.
Trade Uncertainty Eases as Tariff Decision Gets Delayed
U.S. President Donald Trump held back from immediately imposing reciprocal tariffs, signaling potential room for negotiations rather than an outright trade war escalation. This temporary reprieve has helped sustain market confidence, but trade tensions remain a macro wildcard that could impact European export-heavy sectors.
Outlook: Can the Rally Continue?
The STOXX 600’s record-breaking momentum remains intact, but sector rotation is becoming evident. With luxury stocks showing relative strength and defensive sectors like healthcare weakening, investors will be watching macroeconomic signals and trade developments for the next market move.
European stocks are pausing after a strong rally but remain on track for their eighth consecutive weekly gain, marking the longest winning streak since March 2024. The STOXX 600 is down 0.1%, but bullish sentiment remains intact, with the index closing at record highs for the past four sessions. Luxury stocks are leading the charge, with Hermès jumping 4.2% after reporting an 18% surge in Q4 sales, underscoring resilient demand for high-end fashion and accessories. Burberry, Richemont, LVMH, and Kering are also in the green, pushing the European personal goods index up 1.1%.
Luxury Outshines Broader Market Amidst Sector Divergence
The luxury sector continues to be a bright spot in European equities, benefiting from strong pricing power and demand from ultra-wealthy consumers. The latest results from Hermès reaffirm the sector’s resilience, despite macroeconomic concerns and shifting consumer sentiment in mass-market retail. In contrast, healthcare stocks are under pressure, with Fresenius Medical Care falling 6% after U.S.-listed DaVita issued a weak profit outlook, sending its shares down 11% in after-hours trading.
Trade Uncertainty Eases as Tariff Decision Gets Delayed
U.S. President Donald Trump held back from immediately imposing reciprocal tariffs, signaling potential room for negotiations rather than an outright trade war escalation. This temporary reprieve has helped sustain market confidence, but trade tensions remain a macro wildcard that could impact European export-heavy sectors.
Outlook: Can the Rally Continue?
The STOXX 600’s record-breaking momentum remains intact, but sector rotation is becoming evident. With luxury stocks showing relative strength and defensive sectors like healthcare weakening, investors will be watching macroeconomic signals and trade developments for the next market move.