As luxury companies navigate the choppy waters of a global economic slowdown, France’s Hermès has once again found stability in its most iconic creations—the Birkin and the Kelly handbags.

The company reported a 7% rise in sales for the first quarter of 2025, narrowly missing analysts’ expectations, yet confirming its status as one of the sector’s most resilient players.

While rivals wrestle with shrinking demand and pricing pressures, Hermès’ timeless strategy and unwavering appeal to ultra-wealthy clientele have helped it stay the course, even as uncertainty looms over tariffs and China’s property-linked slowdown.

Birkin and Kelly bags drive store traffic and cross-category sales

The Birkin bag—named after British actress Jane Birkin—and the Kelly—immortalized by Grace Kelly—have long been regarded as the crown jewels of the Hermès portfolio.

Their reputation as status symbols has only deepened in recent years, with collectors willing to spend tens of thousands of dollars and wait months, or even years, to acquire them.

In a downturn, they do more than just sell well.

They function as anchor products, pulling customers into the store and encouraging purchases in other categories, including scarves, jewellery, and ready-to-wear.

Known in luxury circles as “pre-spend,” shoppers often build a purchasing history with the brand through smaller-ticket items, such as $270 silk ties or $40,000 bracelets, in hopes of eventually being offered a Birkin.

This strategy remains highly effective.

Even as demand in Mainland China showed signs of strain in the first quarter, Hermès posted growth across all regions, including the Americas, where low stock levels in early 2025 were offset by strong March sales.

Management noted that trends have remained positive through early April.

China’s slowdown and tariff threats fail to shake investor confidence

Hermès’ performance in China—a region facing ongoing consumer caution—was notably subdued.

Yet it stood out relative to competitors, many of whom have seen significant slowdowns across Asia.

In the US, where tariffs on European goods are set to increase by 10% beginning May 1 under the Trump administration, Hermès remains confident.

Management believes it can pass those costs on to American consumers—an assertion few other luxury houses can make with such confidence.

That confidence stems from the brand’s unparalleled pricing power.

In a note last week, Jefferies analysts reiterated that Hermès is well-positioned to outperform its peers, describing the company as a “safe haven” amid ongoing turbulence in the luxury sector.

The analysts maintained a “relative preference” for Hermès due to its elite customer base and consistent demand patterns.

Made to last: low production, high margins

A key element of Hermès’ resilience lies in its ultra-controlled production model.

The brand makes no more than 70,000 Birkin bags per year, each handcrafted by a single artisan over 18 to 24 hours.

Kelly bags take a similarly meticulous approach, often requiring 14 to 20 hours of work by a single leatherworker.

This artisanal method, combined with limited availability and no discounting—even during recessions—has helped Hermès maintain some of the highest margins in the luxury industry.

While rivals like Kering have occasionally relied on markdowns to clear stock, Hermès has never discounted its handbags, reinforcing their status as investment-grade fashion items.

The brand’s careful control over supply not only maintains exclusivity but also drives resale value.

Collectors treat the bags like fine art or rare watches, with many appreciating in value over time.

Even secondhand, a Birkin can command a premium of 30–50% over its original retail price, especially in hard-to-find colours or materials.

Wealthy clientele insulates brand from macro shocks

Unlike mass-luxury players, Hermès caters to the global elite.

According to Bain & Co., the top 2% of luxury buyers account for over 40% of sector spending, and Hermès is disproportionately exposed to this tier.

These consumers are relatively insulated from rising interest rates or cost-of-living concerns, meaning their discretionary spending patterns hold firmer when the economy turns sour.

That dynamic was evident in Hermès’ full-year 2024 results, which showed a 17% rise in sales at constant exchange rates—far outpacing the industry.

Even in the US, where demand softened after February due to tariff speculation, Hermès saw signs of recovery in March.

The quiet giant of luxury continues to outperform

While conglomerates such as LVMH pursue high-profile acquisitions and expand into new categories, Hermès remains focused on its narrow but highly profitable core.

It avoids celebrity marketing campaigns and seasonal fashion fads, instead relying on artisanship, scarcity, and heritage to attract customers.

This unwavering consistency has not gone unnoticed by investors.

Hermès now trades at nearly 45 times forward earnings—more than double the average for luxury peers—and recently surpassed a market capitalization of €220 billion, making it Europe’s second most valuable company after LVMH.

Though it may have missed the mark by a hair in Q1, Hermès remains the industry’s north star—luxury at its purest, and most enduring.

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The S&P 500 index has suffered a harsh reversal this year as it crashed by 14% from its highest point in January, meaning that it has moved into a correction. It was trading at $5,280, down from the YTD high of $6,145. This article explores whether it is safe to buy the dip in ETFs like SPY and VOO, which tracks the S&P 500 index.

S&P 500 index has faced a triple whammy off issues

The S&P 500 index has dropped after encountering a triple whammy of issues. First, the Federal Reserve has maintained a hawkish stance in recent months, citing the strength of the economy and the substantially high inflation rate.

Officials have hinted at two interest rate cuts this year, a move that would bring them at 4% by the end of the year. Even the most dovish economists believe that the Fed will deliver just three cuts this year. 

The Fed has demonstrated that it wants to cut interest rates. Its main challenge is that Trump’s tariffs have increased the likelihood of high inflation in the country, which could trigger stagflation. 

Read more: 5 reasons the S&P 500 and the SPY ETF could dive in 2025

Trump tariffs and recession odds

Second, the S&P 500 index and its ETFs like SPY, VOO, and IVV has dropped because of Trump’s tariffs on most countries, especially China. Tariffs on Chinese goods have jumped to 145%, and Trump has even threatened that they may soar to over 200%.

These tariffs will affect most companies, especially that do business in China. For example, China has already barred its airlines from accepting Boeing aircraft. It has also barred the export of top rare earth materials, which will impact US manufacturing companies, especially those in the auto sector.

Tariffs have also raised the possibility of a recession in the US this year. Most analysts expect that the US will move into a technical recession soon as consumer confidence has dipped. A recession would affect corporate earnings and profitability.

AI bubble bursting

The other primary reason the S&P 500 index has plummeted is that there is a risk the AI bubble is bursting. 

There are signs that this is happening, as firms like Microsoft, Google, and Amazon reduce their investments in data centers. Microsoft has already paused several planned data centers in places like the US and India.

A slowdown in the AI sector would have major consequences in corporate America as it would affect companies like NVIDIA, AMD, and Microsoft. The slowdown would happen because the AI sector has led the charge in growth this year. 

Is it safe to buy the dip in SPY and VOO?

Therefore, with the S&P 500 index and its ETFs being in a correction, analysts are questioning whether it is safe to buy the dip now. Many Wall Street analysts have even reduced their S&P 500 forecast for the year. 

The daily chart above shows that the index has even made a death cross pattern as the 50-day and 200-day moving averages have crossed each other. A death cross points to more downside over time. In this case, such a move would see the S&P 500 index drop to the year-to-date low of $4,835. This makes it risky to buy the index and its ETFs.

However, Trump often views the stock market as the best indicator of a president’s performance. This means that he will likely intervene by announcing major deals with countries. He has already hinted to a potential deal with Japan.

Historically, the S&P 500 index has typically bounced back after entering a correction. Therefore, analysts recommend using dollar cost averaging and purchasing these ETFs incrementally ahead of the next rebound.

Read more: Top 3 reasons S&P 500 index ETFs like SPY and VOO will rebound

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The Dow Jones Index has entered a correction this year, having dropped by over 13% from its highest level. The index, which tracks 30 blue-chip companies, was trading at $39,100, and has recently formed a death cross for the first time in over three years. This article examines the three primary reasons for its crash and how its stocks are performing.

3 reasons why the Dow Jones Index crashed

There are three main reasons why the Dow Jones Index has plummeted this year. First, it has dropped because of the Federal Reserve, which has maintained a more hawkish tone this year. It slashed rates three times last year, and pointed to two more this year even as the economy slows.

Most Fed officials who have talked recently have said that the bank was ready to intervene if the economy slowed drastically.

At the same time, Donald Trump is studying whether he has the power to fire Jerome Powell from the Fed. Such a move would be unprecedented and would raise questions about the bank’s independence.

Historically, US assets, such as stocks and the US dollar, have performed well due to the perceived independence of the Fed.

Second, the Dow Jones Index has also plummeted due to the ongoing trade war, which risks pushing the US into a deep recession. The base 10% tariff and the 145% rate from China has raised concerns that the US economy will continue weakening. Analysts believe that corporate earnings will be impacted.

Third, the Dow Jones has declined due to its exposure to technology. It holds tech companies like Microsoft, Apple, Salesforce, and NVIDIA. While these are all good companies, there is a risk that they will slow down as signs that the AI bubble is bursting emerges.

Dow Jones Index stocks performance 

Most companies in the Dow Jones Industrial Average have declined this year. Still, some all-weather firms have done well because they are less exposed to US tariffs on other countries.

Coca-Cola stock price has jumped by 17% this year because its business does well in all market conditions. Customers will not stop drinking soda because of a recession or stagflation. 

Verizon stock has risen by 10% this year, while Johnson & Johnson, IBM, McDonald’s, Amgen, Travelers, Visa, and Walmart have all risen by over 4%. These firms – except IBM – are all-weather companies that are less exposed to tariff measures. 

Nike is the worst-performing Dow Jones stock this year as it crashed by 27%. This decline is due to the company facing substantial competition from firms such as On Holding, Adidas, and Under Armour. Also, the management’s efforts to turn around the firm are taking longer to achieve results.

Tech firms like Salesforce, NVDIA, Amazon, Apple, and Microsoft have all plunged by over 22% this year. This decline is due to the woes in the technology sector and its perceived overvaluation. 

The other top laggards in the Dow Jones are firms like Walt Disney, Caterpillar, American Express, and Honeywell International.

Looking ahead, the Dow Jones price action will depend on the Fed and Donald Trump. A sign that the Fed is prepared to cut interest rates will be bullish thing for the index.

Further, the start of negotiations with other countries, especially China, will be a bullish thing for the index. 

The ongoing earnings season will largely have no major impact on the Dow Jones and other US indices as the results don’t include Trump’s tariffs. 

History shows that the Dow Jones and other US indices like the S&P 500 and Nasdaq indices, always recover from a correction. 

Read more: Is it safe to buy the dip in the S&P 500 index ETFs like SPY and VOO?

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Chipotle Mexican Grill stock price has crashed in the past few months, moving from a high of $66.6 in December to the current $48. It is hovering near its lowest level since January 29 last year. This article explains why the CMG share price is on the cusp of a bearish breakdown after forming a double-top pattern. 

Chipotle stock price is on the verge of more downside

The weekly chart shows that the CMG share price has been in a strong downward trend in the past few months. It initially peaked at $69.15 in 2024 and has struggled to move above that level.

Chipotle stock has formed a double-top chart pattern at $66.6 with a neckline at $48.20, its lowest level in August last year.

The stock has formed a bearish pennant pattern, a popular continuation sign. Additionally, it has fallen below the 50-week and 200-week Exponential Moving Averages (EMAs), indicating that bears are in control. The two lines are about to cross each other, forming a death cross pattern. 

Oscillators like the Relative Strength Index (RSI) and the Awesome Oscillator have all pointed downwards. Therefore, the Chipotle stock price will likely continue falling in the next few months. 

The initial CMG stock price target will be $44, along the ascending trendline that connects the lowest swings since March 2020. If this happens, the next point to watch being at $35.37, its lowest level in October last year. This target is about 26% below the current level. A move above the 50-week moving average at $54 will invalidate the bearish view.

CMG earnings ahead

Chipotle share price has crashed as concerns about the American economy continue. These concerns have continued rising after Donald Trump’s Liberation Day speech in which he announced his reciprocal tariffs on all countries. 

Before that, Trump announced a 25% tariff on all goods from Mexico, allegedly for its role in the fentanyl business. 

These tariffs means that Chipotle is now paying more money for its inputs since it sources about 50% of its avocados from Mexico. Other suppliers are from countries like Peru, Colombia, and the Dominican Republic. 

A company like Chipotle can only respond to these tariffs by increasing prices on products sold on its stores. The challenge is that a 25% hike will lead to lower sales. The company can also take some of these tariffs in its income statement, which will normally lead to a margin squeeze.

Further troubling for Chipotle is that consumer confidence in the US has continued falling in the past few months. A recent report by the Conference Board showed that confidence plunged sharply last month. 

Therefore, the upcoming Chipotle earnings will provide more color on its business and forward guidance. Wall Street analysts estimate that the company’s revenue rose by 9.5% in the last quarter. The most upbeat analyst see its revenue coming in at $3.08 billion. Chipotle Mexican Grill has a long record of beating analysts estimates. 

The average estimate for Chipotle’s earnings per share (EPS) is $0.28, up from the $0.27 it made last year. Analysts expect that its annual revenue will grow to $12.6 billion this year, followed by $14.3 billion in 2026. 

Wall Street analysts expect the Chipotle stock price to rise to $62.35, up from its current level of $ 48.70. These analysts cite its strong market share in the casual dining industry, and the fact that Scott Boatwright, its CEO, worked closely Brian Niccol, the previous CEO who joined Starbucks last year. 

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