Morgan Stanley on Monday released a note highlighting the collapse in growth for Gold/Watches/Jewlery in China.
Second-quarter growth dropped to 1.6 percent from the 27 percent growth reported for the first quarter. Specifically looking at Swiss Watch exports by price segment, low end price points are getting "less bad" and mid-high end growth has deteriorated over the April to June period.
Excluding Burberry, luxury brands have seen a broad miss on earnings:
As for global picks trading in the United States, Morgan Stanley likes:
Michael Kors (NYSE: KORS)
Nike (NYSE: NKE)
And Morgan Stanley doesn't like:
Coach (NYSE: COH)
The MSCI World Brands Index currently trades at a premium compared with the MSCI World Index by roughly 22 percent year to date and traders will be looking to see the luxury brand bull run finally end.
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