FT News Briefing A hard landing for Europe?
Aug 3, 2023
Concerns are mounting as investors brace for a potential economic downturn in Europe, sparking a cautious shift in luxury spending after a post-pandemic boom. Meanwhile, Nissan faces uphill challenges in China, not only from fierce local competition but also as they reconfigure their strategies to regain market share. The luxury sector is witnessing shifting priorities among consumers, who are now investing in travel instead of high-end goods. The episode highlights the intertwined fates of these industries amid evolving economic landscapes.
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Eurozone Downturn
- Investors are increasing bets that Europe will enter a recession.
- The euro has fallen against the dollar, and European stocks have dipped.
Luxury Slowdown
- Luxury spending in the US is contracting after a pandemic boom.
- This is partially due to more price-sensitive 'aspirational' buyers cutting back.
Shifting Spending Habits
- Americans who engaged in revenge spending during the pandemic are now focusing on travel.
- They may be buying luxury items abroad rather than at home.