Investors get ready to pick in the disliked stock segment

Luxury stocks are cut in half – especially in France – and looking at the American stock market in the discretionary spending segment, there are also consumer-related stocks in big trouble. This means that valuations are starting to look interesting, according to Ole Søeberg, investment strategy for the asset manager Brock Milton Capital. “Valuation-wise, they are at some rather attractive levels,” he says, noting that consumer confidence in the US is at its lowest ever, but economic indicators still show increasing consumption. The stock segment – in English consumer discretionary – covers stocks in both luxury and other consumer goods that are nice to have but not necessary. It is the spending that comes after basic needs are met, so the segment includes stocks such as McDonald’s, Nike, Netflix, and Tesla. Looking at how consumer-related stocks in the US have performed, they have given a return of approximately -6 percent this year, according to data from Bloomberg. This is an underperformance of 20 percent compared to the broader American stock index S&P 500. At Saxo Bank, Oskar Barner Bernhardtsen, the Nordic investment strategy in the bank, also zooms in on consumer stocks, especially in the luxury segment, and he is “not far from” wanting to buy the stocks again. He says this in this week's episode of the podcast “Børsen Investor”. “It is an interesting thought that if consumption is so strong, it is strange that these stocks are so low. There might be some overlooked opportunities here right now,” says Oskar Barner Bernhardtsen, who no longer buys on the grounds that the price declines are due to company-specific factors. The pressure of energy prices According to Johnny Madsen, investment director in Property & Investment Management, an explanation is that wage increases have not risen as much as in 2022, when consumers, especially in lower income segments, were also squeezed by rising inflation. “Consumers don't have much left at the bottom line; they allocate a little to IT subscriptions and instead refrain from buying so many burgers,” says Johnny Madsen. Exactly fast-food chains like McDonald’s, Chipotle, and Wendy’s have all fallen by between 18 and 25 percent this year. And this makes sense, assesses Ole Søeberg: “Consumers are divided into income groups, and only the top 20 percent are dragging the whole load,” says Ole Søberg. There might be some overlooked opportunities here right now Oskar Barner Bernhardtsen, Nordic investment strategy, Saxo Bank According to his data, an average family in the US has approximately $70,000 – just under 467,000 kr. – in annual consumption after taxes. “Their average car is an SUV, and their fuel consumption has gone from accounting for 5 percent of their consumption to now accounting for 8-10 percent due to rising diesel prices,” says Ole Søeberg. Diesel and gasoline prices have risen by 70 and 40 percent respectively in the US over the year. China presses luxury In France, the three fashion stocks Hermes, LVMH, and Kering have lost 40, 40, and 30 percent respectively this year and pulled the French leading stock index CAC 40 by -1.8 percent for 2026. And the luxury stocks are pressured from a completely different front. “It is about the fact that Chinese consumption has completely collapsed,” says Ole Søeberg, who will keep a close eye on what the companies report about China and the other markets in the coming fiscal season “to get a sense of what is happening”. -6 percent are the US consumer stocks have fallen this year – an underperformance of 20 percent compared to the broader US stock index S&P 500 He will pay particular attention to a stock like the sportswear brands Lululemon, which has more than halved in value this year. “Lululemon costs $10 billion (market value, rounded) and has $2 billion in net cash (cash when debt and other liabilities are deducted, rounded), so that leaves $8 billion, which actually looks very reasonable,” says Ole Søeberg, and adds that Lululemon's “China rate is falling apart”. False sense of security In this week's “Børsen Investor” podcast, Ole Søeberg also talks about how much more return global stocks can offer before the year ends, while Johnny Madsen warns private investors against believing that they have a broad exposure in their portfolio if they own a global equity fund. For the US, the entire 64.5 percent of the global stock market (MSCI ACWI) is comprised of the technology sector, which accounts for 34.4 percent, and the two US companies – Nvidia and Apple – account for nearly 10 percent. And in the broad US stock index S&P 500, the technology sector accounts for almost 41 percent, and three stocks – Nvidia, Apple, and Microsoft – account for 21.66 percent of the index. In this podcast episode, we also talk about how the year 2026 ends; what can stop and ruin the already good return on global stocks of 20 percent converted to kroner? And finally, we divide last year's return in the All Star portfolio. Listen and hear which two good causes receive a portion each of the total approximately 175,000 kr. Hosts: Gro Høyer Thielst and investment editor Simon Kirketerp. Listen to the episode on Apple Podcasts and Spotify. Follow the All Star portfolio here.