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Trump’s victory: luxury ready to seduce the wealthiest, the big winners of the election

By Cristina D’Agostino06 novembre 2024

Trump's victory has prompted the wealthiest to rejoice at his tax policies, which are largely in their favour. The luxury goods industry is rubbing its hands and sharpening its arguments to win them over. However, aspirational customers are not coming back. Here's how.

Trump's policies are favorable to the richest 1% and to corporations. Luxury brands will do everything in their power to attract them (Shutterstock)

For the markets, Trump's victory was the best-case scenario

Arthur Jurus, Head of Investment Office at ODDO BHF (Switzerland)

On Wednesday morning, the results were already clearly in Trump's favour. For many financiers, his victory is good news, as Trump's policies are known to be tax-friendly for the wealthy. When asked about the repercussions of the US election on the global economy and luxury goods, Arthur Jurus, Head of Investment Office at ODDO BHF (Switzerland), explains: 'The markets had already been anticipating Donald Trump's victory for a month. From the beginning of October, long rates rose from 3.7% to 4.3%, an effect linked to his inflationary programme. During the campaign, he campaigned for higher tariffs, lower public spending, lower corporate taxes and higher wages, all of which would have an inflationary impact on the US economy. This is why long-term interest rates are rising. Moreover, this is the best-case scenario for the markets, i.e. his election coupled with a Republican Congress, in line with his policy of lowering corporate taxes.'

Luxury stocks on the rise

The markets had already been integrating Donald Trump's victory for a month (Shutterstock)

Trump's policies favour the richest 1% and companies

Myret Zaki, economics journalist for the Swiss media Blick

How are the US and European markets reacting to this latest Trump victory? At midday on Wednesday 6 November, the main luxury goods indices were up at the time of writing. Richemont is up +2.66% at €127.45, Kering is up +2.10% at €235, Hermès is up +1.9% at €2119, and LVMH and Swatch Group remain stable at 0.14% at €658 and 0.70% at CHF175 respectively. In the United States, Tesla rose by 3.54% and bitcoin jumped by 8.12%. These results also reflect the markets' propensity for quick decisions and clear-cut victories, uncertainty being the stock market's worst enemy. By comparison, in November 2020, US equities rose by 10%. The same scenario is likely to play out again.

In fact, the United States is clearly tilting to the right, leaving the West Coast alone in its Democratic choice. Myret Zaki, an economics journalist with the Swiss media outlet Blick, explains: 'Trump's policies favour the richest 1% and companies. Large fortunes, high incomes, and shareholders who invest in the stock market would be subject to capital gains tax and investment portfolio tax. They have been greatly benefited by Trump's tax cuts since 2017 and by the Fed's huge capital injection in 2020-2021. The tax cuts will expire soon. Trump will extend them.'

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