Diamond-related shares mainly fell in 2018, in line with a global stock-market downturn. Investors fretted about trade tensions, uncertain consumer demand and the impact of the US Federal Reserve raising interest rates in December. The S&P 500 index ended the year more than 6% down, while Hong Kong’s Hang Seng slid 14%.
It wasn’t all bad: Some diamond miners did well, while retail offered a few exceptions to the rule. Here were the main takeaways from the year in stocks :
1. US retailers slumped.
Growing competition from e-commerce players, and shaky outlooks for American consumer spending, made it a difficult time for brick-and-mortar chains. Signet fell 44% in 2018, with the bulk of its losses coming in December following disappointing third-quarter earnings and a wider Wall Street rout in the final weeks of the year. Macy’s (+15%) bucked the trend as it reported good financial results.
2. The trade war hit nearly everyone.
The US-China tariff dispute, and the resultant depreciation in the Chinese yuan, dented Hong Kong jewelry stocks, with Chow Sang Sang (-38%) leading the declines. Tiffany & Co. (-23%) also suffered, as the currency devaluation dampened Chinese tourists’ spending power abroad.
European luxury stocks generally dropped due to the same trade concerns, as well as nerves over Brexit and the state of the eurozone economy, with the region’s Euro Stoxx 50 index down about 15%. Disappointing profit figures and a buyback of watches knocked Cartier owner Richemont from its peak in mid-May, and the stock continued to fall to a full-year decline of 29%. Swatch Group slid 28%. Pandora slumped in mid-May after weak Chinese sales, and never recovered, recording a 61% decrease for the year.
Gucci owner Kering (+13%) outperformed the European market after experiencing positive sales across its brands, for which jewelry is a relatively small element.