Need to Know: Why pricey French bags are better than U.S. tech, according to this analyst

by | Sep 1, 2023 | Stock Market

The first Friday of the month usually means one thing: time for the nonfarm payrolls report. Judging by action over the last several sessions, the market is entrenched in one of its ‘(relatively) bad news is good news’ mindsets. So, equity bulls will be hoping the jobs data signals a cooling labor market that will encourage the Federal Reserve to call a halt to its campaign of interest rate rises.

With the unemployment rate jumping unexpectedly, it appears that has come to pass, thus bond yields should fall more and this in turn may lend further support to the more highly-valued technology stocks in particular. But there’s a better bet to be had, reckons Dhaval Joshi, chief strategist at BCA Research. In a new note likely to give the more parochial American investors severe conniptions, he says that shares of French luxury goods groups will trump those of U.S. technology. “The stock market’s pre-eminent growth sector is not U.S. tech, it is French luxuries. No other sector can compare with French luxuries’ massive and sustained pricing power,” says Joshi. That’s bold. So why is this? First, luxury goods don’t play by the same rules. To save us all from some economic wonkery involving ‘e …

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