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>> This should be a sight to cheer for the world's luxury brands. China's shoppers seem to be spending freely on high-end goods. Earnings out late Tuesday from Louis Vuitton parent company, LVMH, raising hope for the sector. Strong demand for posh handbags, helping sales to rise by a forecast busting 14%.
>> These are pretty good numbers from Elvia Mapes. It would have been reasonable to expect that this would have sent a soothing signal to the rest of the market.>> Not so much, though. Shares in luxury brands, tumbling in Europe on Wednesday. LVMH, Burberry, Moncler, many others, all down.
Some as much as 5%. Reuters luxury goods correspondent, Sarah White, in Paris, says it all comes back to one thing.>> Some people are particularly worried about the effect a trade war between the United States and China could have on luxury stores. That's hit the currency, that's fueled worries as well that people's purchasing power might start falling.
>> Morgan Stanley, among the party poopers. In a note Wednesday, it warned that a Chinese slowdown was still the number one risk. The country's consumers account for about a third of all luxury purchases, but traders may also have been looking for a moment to sell.>> Luxury stocks are very highly valued at the moment, which means that they're quite expensive.
That's on the back of a rally in the last two years.>> It all leaves investors with a quandary, focus on the robust LVMH numbers, or the slowdown warnings? All eyes now turn to Gucci owner, Kering. It's forecast to post strong earnings later in the month. That may not be enough to stop people worrying about China's shoppers.