Charts 1 & 2: Spirits still suffering

Rémy Cointreau's share price has fallen back to 1994 levels and Pernod Ricard's to 2007 levels. The spirits sector is experiencing a sharp slowdown, particularly in the key markets of the US and China. Rémy Cointreau has been hit hard, with a downward revision of its forecasts: Cognac sales are expected to fall by 21.4%, and overall organic sales are estimated to decline by 17.9% in FY 2024/25. EBITDA estimates have been reduced for several years, mainly due to higher distribution costs, leading to EPS dilution and a sharp drop in DCF (-36%). Pernod Ricard is resisting better, but saw its revenue decline by 3% in Q3, penalized by a 5% fall in China and a 31% drop in Travel Retail. However, the group is maintaining its annual targets, with a stable margin and rigorous cost management. The sector remains fragile due to geopolitical uncertainties, a deteriorating consumer environment and increased pressure on margins, although valuations are becoming more attractive.

Rémy Cointreau - monthly review - (Price, Moving averages and Bollinger brackets)

Pernod Ricard - monthly review - (Price, Moving averages and Bollinger brackets)

Chart 3: Hermès neck and neck with LVMH

For the first time, Hermès and LVMH are neck and neck in terms of market capitalization, an unprecedented situation that illustrates the turning point the luxury sector is experiencing. Long praised for its diversification strategy, LVMH is now facing a sudden change in perception: slowing demand in China and the United States, Louis Vuitton's relative loss of exclusivity, growing criticism on social media... all of which are weighing on its valuation. In contrast, Hermès, faithful to its single-brand model, is posting impressive growth (+9% in Q1 2025), seemingly immune to the global economic climate. This capital alliance between the two giants reflects not only a reassessment of growth prospects, but also an increasingly strong premium being placed on rarity, timelessness, and consistency, of which Hermès remains the absolute archetype today.

Total return performance over four rolling years

Chart 4: "Gold is the new crowded trade"

In April 2025, gold emerged as the new safe-haven asset par excellence, buoyed by a rare bullish consensus among investors, after having long been relegated to the sidelines in favor of technology stocks. Just a few months ago, the frenzy surrounding the "Magnificent 7," a group of tech giants experiencing exponential growth, captivated the markets, overshadowing tangible assets. But the return of geopolitical uncertainty, persistent real interest rate volatility and recession fears have reignited interest in the yellow metal. A symbol of stability, gold is benefiting from robust demand from central banks, private investors and institutional funds alike. This shift in risk appetite toward more defensive positions reflects a profound change in climate, where caution, hedging, and capital preservation are taking precedence over the relentless pursuit of performance.

  • December 2024: Long Magnificent 7
  • April 2025: Long Gold

Chart 5: The VIX peaks – a good sign for the future?

High volatility in theS&P 500 index (the top 1% in terms of volatility corresponds to a VIX above 47), as we have seen recently (VIX closing at 52.33 on April 8, 2025), is generally followed by a period of strong performance for the index in the years that follow (1990-2025).

Chart 6: Small-cap discount

Even when compared to equally weighted large-cap indices, which mitigate the disproportionate influence of mega-caps, small-cap stocks continue to trade at a significantly higher valuation discount than normal.

Chart 7: US market valuation

After experiencing one of the best buying opportunities in history in 2009, the US market now finds itself, sixteen years later, facing one of the most unfavorable risk environments in decades. While betting on America remains a sound long-term strategy, there are cycles when it is justified to step back. In macroeconomics, the best performances sometimes occur in very adverse environments, and vice versa. Currently, US assets are trading at high valuations, despite a significant rise in political risks and an estimated probability of recession of at least 50%. In other words, when markets are "priced for perfection" in an increasingly imperfect environment, it is time to pause and reflect.

Chart 8: Outflows from the US

Market sentiment is changing: a record number of global investors are expressing an intention to underweight US equities. This trend is reflected in capital flows, indicating a real shift away from equities. Several factors are driving this rotation: fears of a weakening dollar, still high valuations, uncertainty about future policies, and the risk of recession. For many, reducing exposure to US equities now appears to be a prudent and rational decision.