To The Moon

LVMH's Plummet

Luxury goods conglomerate $LVMH-Moet Hennessy Louis Vuitton(LVMHF)$ was the talk of the town earlier this year after it briefly became Europe’s most valuable company by topping a $500 billion valuation.

However, it’s seen a slow descent back to Earth since then. Today, this trend continues, with the stock down nearly 30% from its peak.

Q3 Earnings

Third-quarter revenues grew 9% YoY to roughly $21 billion, down from a 17% increase in the second quarter. Driving the decline was a 14% YoY decline in sales from its wines and spirits division. And Asia’s slow recovery continues to weigh on results, with revenues from Asia excluding Japan rising just 11% YoY, down from 34% in the second quarter.

The future of the company's stock remains uncertain, but it's evident that even the high-end consumer is beginning to cut back. From a technical perspective, there is still room for further declines, and the stock may hit a new low.

$Novo-Nordisk A/S(NVO)$ Emerges as Europe's Leading Market Giant

In a different industry, Novo Nordisk's weight loss drug, Ozempic, is showing promising early results in delaying kidney disease progression in diabetes patients, leading to a 6.27% increase in its shares.

Elon Musk, the CEO of SpaceX and Tesla, endorsed the drug, attributing his fit and healthy appearance to its use. Novo Nordisk now claims that the drug's benefits extend beyond weight loss, reducing the risk of serious cardiovascular events, such as heart attacks and strokes, which significantly boosted the company's market value.

With the recent surge in popularity of weight loss drugs like Ozempic, there have been various theories about their impact on different industries.

Impact on the food and beverage industry?

One theory suggests that they may affect food and beverage stocks by encouraging people to eat less and make healthier food choices. $Wal-Mart(WMT)$ reported a slight decline in food shopping among those taking Ozempic and other appetite-suppressing medications.

However, $Pepsi(PEP)$ contradicted this theory, stating that the impact on its business has been negligible, and it continues to monitor this trend.

The decline in certain stocks may be attributed to rising interest rates, as the appeal of low-growth, high-dividend stocks like consumer staples, utilities, and telecom diminishes when risk-free rates rise. Popular companies like $Pepsi(PEP)$, $General Mills(GIS)$, $Coca-Cola Bottling Co Consolidated(COKE)$ and $Hershey(HSY)$ reached their peak prices around May when interest rates were at their lowest, and their declines accelerated as interest rates reached new highs about two months ago.

The use of Ozempic and other weight-loss drugs will be a major trend felt across industries. However, it’s far too early to tell the potential consequences since less than 1% of the eligible U.S. population currently uses them.