The VIX, which is a measurement of volatility in the market, finally gets a rest as US markets overnight were flat. With no major tariff announcements everyone was able to steady themselves.
- S&P 500 = +0.016%
- Nasdaq = +0.02%
- AUD = +0.51% TO $US0.6352
Lulu -uh oh
The internet can find the lighter side of things in any dark moment. When tariffs were being slapped on absolutely everyone we were gifted memes of penguin outrage. Now it is China’s turn. Over on Owen’s favourite platform, TikTok. Chinese influencers are exposing the secrets of where all of your favourite brands make their luxury goods.
In an unexpected twist in the trade war, Chinese influencers are telling US citizens, and the world, how they can buy luxury goods from brands like Lululemon Athletica Inc (NASDAQ:LULU), Nike Inc (NYSE:NKE), Hermes and others, direct from the outlets that make them.
The videos suggest the majority of luxury items, which say they are handmade in Italy, are actually made incredibly cheaply in China. They suggest American consumers can buy the exact same items without the label and save, in some cases, thousands. One video showed a Hermes bag, which would retail for $US30,000, selling for just $1,200. Even after the 125% tariff on these imports the American consumer is saving significantly by avoiding the brands mark up.
I think this is quite an ironic twist of fate for Lululemon, who’s founder infamously said the name of the brand is meaningless. It is called Lululemon so it would sound exotic and “difficult to say” for Asian consumers.
Year-to-date Lululemon Athletica’s share price is down 31% and Nike Inc is down 27%.
A reminder to zoom out
As the news cycle has given investors a moment to breathe, it’s a timely reminder to zoom out. We’ve been paraphrasing a Buffett quote a lot lately, “In the short term stocks are risky, in the long term it’s risky not to own stocks”. It is very easy to get caught up in the day to day movements and get sucked into the doom and gloom.
Take a moment to set the charts for your ETFs such as Vanguard Australian Shares Index ETF (ASX:VAS) and iShares S&P 500 ETF (ASX:IVV) to one year, five years or even ten years. It’s hard to imagine but even after everything, over the last twelve months VAS and IVV are still positive. On price movement alone, not including dividends, VAS is still up 1.72% and IVV is up 7.92%.
Eyes on India
Finally, I see ETF issuer VanEck is adding an Indian ETF to its stable posting it will soon be launching the VanEck India Growth Leaders ETF (ASX: GRIN). This will become the fourth Indian focused ETF on the ASX. It will join Betashares India Quality ETF (ASX:IIND), Global X India Nifty 50 ETF (ASX: NDIA) and Fidelity India Active ETF (ASX: FIIN).
Every few years I have someone ask me, “what about investing in India?” With the launch of GRIN, it might be worth a deeper look into this emerging market.
