(Boursier.com) — Luxury is recovering and driving the trend this weekend, like LVMH which advances 2.4% to 722.8 euros, in the top positions of the CAC40. Bank of America strategists have raised their advice on the luxury sector to ‘overweight’, saying the compartment’s recent underperformance now fully reflects an expected slowdown in global activity.
The BofA team led by Sebastian Raedler believes that the value rally could reverse, as the expected rate cut will weigh on banks, while deteriorating momentum will hurt oil prices and energy stocks. “In addition, as a growing sector, the relative performance of luxury goods should benefit from the further decline in real bond yields that we expect,” adds BoA. The bank’s experts predict a decline of 13% for the Stoxx 600 by the start of next year and an additional 8% underperformance for cyclical stocks compared to defensive stocks.
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