Short interest in European luxury goods companies has surged as tariffs raise prices and weaken demand. The sector is underperforming the Eurostoxx, with individual names like Swatch and Hugo Boss showing elevated squeeze scores. The setup suggests increased risk of forced buying should price momentum turn unexpectedly.

We wrote earlier about the European luxury goods sector. “European Luxury Sector Faces Squeeze Risk as Short Interest Surges Amid Weak Demand”, October 28, 2024.

Many commentators have written how the tariffs will harm the luxury goods makers, using a price increase of 6% on average.

Some examples are Chanel, Louis Vuitton, and Swiss watches with Swiss tariffs of being more than 30%.

The graph shows an increase in the short position recently.by 50%.

The sector is down 27% more than the Eurostoxx.

Swatch short interest is up as Switzerland faces a 31% tariff.

The squeeze score is over 80.

Hugo Boss short interest is significantly up. Its squeeze score is 82 like Swatch.

The European luxury sector is facing intensified pressure from rising tariffs and short positioning. Names like Swatch and Boss show extreme technical risk, with squeeze scores above 80. In a volatile policy environment, any reversal in sentiment or macro news could trigger a sharp repositioning from short sellers.

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