News and analysis

Shares of Nestlé jumped by 9.3% on Thursday. The Switzerland-based firm is famous for its long history dating back to the 1860s and a vast portfolio of very popular brands of food, snacks and beverages like KitKat chocolate bars, Nescafé and Nespresso coffee, Gerber nutrition for babies, and Purina pet care. The company reported solid “real internal growth" (RIG) than it was widely expected, even though outlining some cost reductions plans under new chief executive Philipp Navratil.

RIG is a financial metric that measures a company's sales growth purely from volume increases, while stripping out the balloon effect of price hikes and acquisitions. RIG compares the current year's sales volume, valued at the company's prices of the previous year, to the actual sales of the prior year. This seems different from the concept of organic growth, which reflects overall results including new products and opening new locations. While Nestlé 's organic growth for the first nine months of 2025 was at 3.3%, it was reportedly driven by 0.6% of RIG plus about 2.8% from pricing. Meanwhile, its last quarter's organic growth improved to 4.3%, with RIG rising to as much as 1.5%.

The huge progress that has impressed investors so much is complemented by the firm's restructuring plans to generate extra annual savings of CHF 1 billion by 2027. This may come at the cost of cutting 16,000 jobs globally within a frame of the so-called “Fuel for Growth” program. You may like this or not, but market crowds usually like such things when they are effective. Everything is sold everywhere as fast as possible. Americas reported CHF 25.3 billion in sales with 2.5% organic growth. Asia, Oceania and Africa posted CHF 15.3 billion with 2.7% growth. Even the stagnating EU countries altogether recorded CHF 12.8 billion with 4.3% growth in sales. China's market reduced organic growth by 0.8 percentage points in the third quarter, but there is a great potential to contribute more.

Records among product categories are confectionery (+8%), powdered and liquid beverages like  Nescafe Dolce Gusto (Nesquik) etc (+7.5%), Nespresso (+6.7% of organic growth fuelled well by pricing and double-digit numbers in the US and Canada, waters & premium beverages like Maison Perrier and Sanpellegrino (+4.4%). And all this taken together will generate operating profit margin exceeding 16% and supposedly more than CHF 8 billion in free cash flow in 2025. The accomplished clear break through the "double bottom" pattern technical resistance this week has already resulted in a price touch of above CHF 83, paving the path for the further move to at least CHF 90, if not CHF100.

Navratil said his priority is to strengthen growth through sharper execution and disciplined resource use. “Driving RIG-led growth is our number one priority,” he emphasized, as “the world is changing, and Nestlé needs to change faster”. I can't read his mind but I am buying this.

The luxury industry faces something similar to 2020 when there was a high demand due to COVID-related passion to wealth accumulation. In the pandemic time, the money printing press was leading to devaluation of both the Dollar and the Euro. Now, the ongoing cycle of interest rate cuts on both sides of the pond is fulfilling this job pretty well. When looking at the madly climbing Gold prices, now above $4,000 per troy ounce, rich families think that branded items from Louis Vuitton bags to Moet champagne will soon become even more expensive. They no longer put off expensive purchases for later, but spend money to save even more later. As a result, shares of LVMH (Louis Vuitton Moet Hennessy) controlled by French billionaire Bernard Arnault have made their best performance in over two decades this week.

The stock added more than 10% to its market value to reach €300 billion euros, which also brought almost $70 billion per day to consolidated market caps of the whole European luxury industry reflected by the STOXX Europe Luxury 10 index, Reuters calculated. This outpaced the last big buying spree for the segment, which happened in early 2024. The jump from under €540 at closing price of October 14 to the new highs of around €610 the next day has been prompted by LVMH quarterly results, which demonstrated huge luxury demand in China. The world’s top group in the industry soared as much as 13%, substantially exceeding consensus estimates as it hit over €40 billion in three-month sales for the first time ever. By the way, all major LVMH rivals like Hermes, Kering, Richemont or Burberry, immediately gained between 5% and 9% on hopes that China's demand show will go on.

Sales in mainland China turned most positive, as shoppers were responding to new store experiences, such as Louis Vuitton’s cruise ship boutique in Shanghai. This happened despite the recent property crisis and some trade war effects. Chinese nationals reportedly account for a third of all global luxury sales in the segment. Sales were above expectations across all LVMH divisions like span beauty and jewellery, fashion and spirits, and hotels as well. The only thing is that its fashion and leather goods division, which was considered as the group's profit driver, improved from the previous quarter, but still declined 2% YoY. Again, some experts are feeling that the next potential speedy acceleration will come only in the second half of the next year, as more collections from new and popular designers will enter stores in the second quarter of 2026.

Anyway, rising momentum hints that a recovery to at least €750, where LVMH stock has been already at the beginning of 2025, then followed by moderate stagnation in sales, is inevitable in nearest months while higher targets could be postponed and achieved in 2026, indeed. Nevertheless, UBS upgraded LVMH to Buy, lifting its target price to €680 from former €513, as "actions taken by the company to improve performance in its crucial Fashion & Leather Goods division are proving effective". This implied as much as 33% upside from LVMH’s current market price of just around €600. It's worth recalling the €886.15 peak price for LVMH in March 2024. Since then, the global inflation pressure has been eating away at consumer demand, but now cheaper money combined with more and more expensive precious metals are starting to help luxurious shining.

The U.S equity market, Bitcoin and numerous tokens lost much of the gains accumulated during previous couple of months. The S&P 500 broad barometer plummeted from its well above 6,750 points achievements to 6,510 as a weekly closing level, losing 3.33% within one regular session. The crypto environment lost a reported $8.5 billion in less than one hour due to massive liquidation of bullish bets while BTCUSD was sliding from $122,000+ to the bottom of near $105,000, only to bounce back more than halfway to the $115,000 area over the weekend. All those tech behemoths with trillions of market caps in their pockets fared much better as well, with chip designer Nvidia and hyping EV-maker Tesla adding more than 3%, Google search generator of ad income, cloud data and e-commerce platform Amazon, social media giant Meta with its stable ad revenues rising all up about 1.8% already in the first trading hour of US Monday morning, October 13. Broadcom (AVGO) shares are doing exceptionally well, soaring by nearly 10% after today's strategic collaboration pact with OpenAI for deploying 10 gigawatts of custom AI accelerators to signify "a pivotal moment in the pursuit of artificial general intelligence," said Hock Tan, CEO of Broadcom. There are big businesses that don't care about this trade fray at all, like Netflix, which barely suffered on Friday, and they even had their ratings boosted by some investment houses.

Investors appear to have been knocked down but are quickly recovering from the blow of U.S.-China aggressive trading rhetoric. So, what exactly happened? Beijing is introducing export controls with a permitting procedure for rare earth metals. Chinese authorities added some "special" port service charges for American ships. However, Beijing has already commented that the country's export controls "are not export bans", so that "any export applications for civilian use that comply with regulations will be approved, and relevant enterprises need not worry", according to China’s commerce ministry. Could this affect military production for Pentagon orders, such as the latest F35 jets? Probably yes, just as it could also serve as a negotiating tool for U.S.-China's competitive measures in the cutting-edge AI chip segment, but the blackmail strategy in the latter case is a two-way street. Thus, Donald Trump's announcement on Friday of 100% tariffs on all Beijing goods starting November 1 also looks like a simple muscle-flexing exercise ahead of his scheduled meeting with Xi Jinping before that deadline date.

U.S. Treasury Secretary Scott Bessent already confirmed in his interview with Fox Business Networkthat Donald Trump was "on track" to meet with China's supreme leader in South Korea as the two sides "have substantially de-escalated". Scott Bessent added that sharp countermeasures from Trump last Friday would not go into effect until November 1, with the meeting still being "on". There will also be "lots of staff-level meetings" this week on the sidelines of the World Bank and IMF (International Monetary Fund) annual meetings in Washington, he said. Trump himself and his vice-president JD Vance already opened the door to the upcoming China deal. Trump hinted at a possible off-ramp for Beijing to reassure spooked markets by writing on Truth Social: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” JD Vance called on Beijing to “choose the path of reason”, claiming that Trump has more advantage if the fight drags on.

In short, our major conclusion is that just like the things developed after Trump's "Liberation Day" in early April, with his massive and double digit tariff package for almost each and every country, here we deal again with simply preparatory verbal shelling that won't necessarily lead to actual combat and tall trade barriers. Most fundamentally strong market assets not only survived but also grew to become even much stronger, rapidly rising during last six months, and they'll continue to do so on another act of dip buying. This week and the next one could be used by many investors for accumulating their money resources to purchase even more tech stocks, especially AI-related ones, and more crypto assets for their investment portfolios and just for the sake of short-term speculative activity on cheaper giants. We estimate that this re-buying process could begin even right now or within a few days.

Dogecoin (DOGE) is rising by 2.0% to $0.2017 on Monday, attempting to recover after a devastating plunge on Friday, when it collapsed by 66% to $0.0830. The crash was triggered by U.S. President Donald Trump’s announcement of 100% tariffs on Chinese imports starting November 1, which sent shockwaves through global markets and pushed Bitcoin down by 15.8%. Although Trump later attempted to downplay the impact of his decision, the resulting $40 billion one-day wipeout in the crypto market left deep scars. Dogecoin is now struggling to hold above the $0.2000 level, and failure to stabilise here could open the door to another decline below this threshold.