Reuters reports that an escalating trade war between the United States and China could abruptly end a glittering stock market run for luxury goods firms. Some investors are already put off by lofty valuations in a sector powered by shoppers in the two countries.
From pricey handbags to designer shoes, booming sales at the European companies that dominate the industry like Louis Vuitton owner and Gucci parent Kering have made them investor favorites. Their shares are still near record highs.
But the possible trickle down effect of tit-for-tat tariffs hikes on consumers is adding to jitters over heady valuations. This even though luxury firms are not as directly threatened by rising protectionism as carmakers and industrial companies.
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