September 27, 2024 11:37 GMT
CONSUMER CYCLICALS: Luxury bid again
CONSUMER CYCLICALS
Burberry +6%, Kering +4%, SXXP +0.3%
- Digging themselves out of lows.
- Both now approaching levels they were at after their July earnings updates.
- As we have said before though grouped in these posts different magnitudes of risk (single brand, scale etc.) - despite the only 2-rating difference. It is reflected in market pricing.
- To be clear we are not endorsing reading into equity moves; Kering equities continued selling off after earnings on macro weakness, €/£ cash bonds did not (~LSD widening at most). So we see both effectively heading into earnings on the same page now.
- On Burberry yes £30s continued selling off with equities but we would argue that was exaggerated by a mispricing in primary. Add on the abysmal P/E equities are still trading on and again we are cautious on reading through.
Keep reading...Show less
134 words