What's going on?

LVMH, the world�s largest luxury conglomerate, revealed third-quarter sales late last week that were, like, far fancier than analysts had hoped � and the French giant had China to thank.

What does this mean?

Ignoring the effects of currency swings, LVMH�s revenue was 12% higher than the same time last year, flying in the face of forecasts for a 1% decline. Chinese consumers typically contribute half the annual growth in global luxury spending, and last quarter they didn�t let a piddling pandemic stand in their way. Instead of traveling to Europe or the US, however, shoppers bought local: LVMH made more selling high-end handbags in China than it did a year ago. The country�s luxury lovers also splashed their cash on liquor brands like Hennessy Cognac � meaning overall revenue at LVMH�s drinks unit declined by just half as much as feared.

Why should I care?

For markets: Glass half full (of Mo�t).

LVMH is seen as a bellwether for luxury: an indicator of the entire industry�s health and direction. The company�s stronger-than-expected update � which helped its stock rise 7% on Friday � may now put rivals� forthcoming updates in a more flattering light. Herm�s, home of $300,000 Birkin bags, makes half its sales in Asia, while Gucci owner Kering does a lot of business in China; the companies� share prices respectively rose 2% and 4% as investors likely anticipated good news to come.

The bigger picture: Stuck in the K-hole.

Recent data illustrates how the coronavirus crisis has benefited the rich while further disadvantaging the poor � a so-called �K-shaped recovery� that�s attracting the attention of policymakers and investors alike. European luxury stocks are, on average, up almost 30% over the last six months, buoyed by well-heeled spending � while the region�s stocks overall have risen only 20% as some mass-market companies suffer from more reserved customer spending.