Finimize - 👔 Hermès rolled up its sleeves

Hermès struck a profitable pose | British retail sales came in strong last month |

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Today's big stories

  1. Hermès strutted its stuff last quarter, as chic shoppers across the globe lived it large
  2. The bitcoin road is littered with traps, so here's how to spot them – Read Now
  3. British retail sales bounced back last month, throwing surprised economists a curveball

Hermès Stole Ahead

Hermès Stole Ahead

What’s Going On Here?

Hermès's results, out on Friday, showed that it wrapped up 2022 in vogue.

What Does This Mean?

Hermès might begin with a silent letter, but it ended last quarter with results that speak loud and clear. That’ll come as a relief to investors, who were probably expecting the worst: after all, the recent results of rivals LVMH and Kering were dulled by disruption in China. But somehow Hermès managed to escape that fate, with sales in the Asia-Pacific region growing by about 25% last quarter. A new flagship store helped stateside sales shine too, with demand for its jewelry, leather goods, and watches staying hot. In short, the French luxury group capped off the year in style, smashing through expectations for the quarter and the whole of 2022. And with the firm planning to up production of its iconic Birkin bags, Hermès’s future could be in the, ahem, bag.

Why Should I Care?

The bigger picture: Modish Middle Kingdom.
The US and Europe were the world’s top luxury consumers last year, but China's getting ready to overtake them: a recent report by PwC predicted that the country will account for a quarter of the global luxury market by 2025 – small wonder, with the nation reopening and its middle class getting ever richer. Luxury brands had already been flocking eastward, with more than half of 2021’s luxury store openings taking place in the People’s Republic – and now some brands are refreshing their designs and marketing campaigns in the hopes of making a buck from Chinese festivals too.

For markets: French finery.
Luxury stocks are a hot commodity these days, with some investors saying the sector's colossuses could replace Big Tech as the strongest growth stocks. And while that’s still only conjecture, one thing is for sure: LVMH, Kering, and Hermès have been major drivers of France's CAC 40 index this year – keeping it above the UK as Europe's most valuable stock market.

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Analyst Take

How To Avoid A Bitcoin Bear Trap

How To Avoid A Bitcoin Bear Trap

By Jonathan Hobbs, Analyst

Bitcoin dropped about 12% in the first half of February – only to then blast 18% higher to a new yearly peak of just over $25,000. 

It was a classic “bear trap” for investors who sold after the drop, or traders who tried to short the OG crypto, expecting to profit from an even bigger downside move. 

I think the road to higher bitcoin prices will be littered with traps just like this

So, that’s today’s Insight: how to spot a bear trap – and how to use them to your advantage.

Read or listen to the Insight here

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Great Bargain

Great Bargain

What’s Going On Here?

Data out on Friday showed that UK retail sales beat the January Blues, as last month’s discounts helped shopping stage a comeback.

What Does This Mean?

After lackluster retail sales in late 2022, economists were bracing themselves for a 0.3% drop when January rolled around. But shoppers had other ideas: they proved quick on the draw with their wallets last month, snatching up discounted makeup, furniture, and jewelry in the bumper post-Christmas sales. Online stores also reaped the rewards of that spending – and fuel sales jumped too, as the lowest prices in almost a year had folk lining up at the pumps. Sure, there were a few categories dampening the mood – food and clothing each took a dip – but the overall volume of goods sold in January still came in 0.5% higher than December.

Why Should I Care?

Zooming in: Not a U-turn.
This uptick is welcome news, but let’s not get carried away: retail sales are still 1.4% below their pre-pandemic levels, and inflation means shoppers are getting a lot less bang for their buck right now. And that’s not set to change anytime soon: after all, inflation in the UK may have fallen to a five-month low in January, but wage growth is still trailing behind it. And with that trend likely to continue, households are in a serious pinch – especially with government support being axed and homeowners having to remortgage at higher rates. The end result: households have wound up with less cash to splash – which could be why economists see retail sales resuming a downward trend for the first half of 2023.

The bigger picture: Hikes ahead.
That outlook bodes badly given how much Britain's economy depends on consumer spending. And it doesn’t help that the Bank of England's economy-hitting interest rate hikes are set to continue. In fact, markets shifted after Friday’s surprise data, pricing in a higher chance of rates rising another 0.5 percentage points before the summer's out.

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🥳 Coming Up This Week…

All events in UK time.

🏠 How To Start Investing In UK Real Estate: 6pm, February 20th
🗞 The Relationship Between News And The Markets: 5pm, February 21st
✍️ What Are Investment DAOs And How Do They Work?: 6pm, February 22nd

👀 And After That…

💸 How To Pick Winning Exchange Traded Funds: 5pm, March 7th
🌥 Do Recessions Have A Silver Lining?: 5pm, March 8th
🌎 Three Ways Long-Term Investors Can Act On Climate Change: 12pm, March 21st
🚀 What Will Be The Next Big Thing In Artificial Intelligence?: 1pm, March 22nd

🎯 On Our Radar

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  3. One more cup of coffee. Here’s the lowdown on what a cup of joe does to your body.
  4. Back-burner relationships. Ditching “what ifs?” about old flames can be tricky.
  5. Bets bite back. The creator of r/WallStreetBets is suing Reddit.
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