Luxury: bear market rally ahead?
XLY•Europe’s top 10 luxury stocks have fallen more than 37% from their February 2025 peak. Berenberg sees a growing near-term chance of a bear-market rally after a steep third-quarter sell-off, despite expecting China’s luxury spending recovery to take years.
1. Sector outlook
Berenberg said China’s luxury market had a weak Golden Week and a disappointing start to the fourth quarter, reinforcing concerns about sluggish demand. It cited cyclical and structural pressures, including a weaker stock market, rising Chinese competition and a booming second-hand market.
2. Possible near-term rebound
The bank is maintaining its longer-term bearish stance but sees conditions falling into place for a rebound. Analysts including Nick Anderson said there was “the growing chance, near-term, of a bear-market rally after Q3's steep sell-off.”
