Live Markets: BofA says beauty has staying power as consumer growth fades

L'oreal SA

07/10/2026 15:17

Main US indexes red; Dow off most, down ~1%
Industrials weakest S&P 500 sector; healthcare leads gainers
Euro STOXX 600 index down >1%
Dollar rallies ~0.6%; US crude gains slightly; gold down ~1.5%; bitcoin down ~3%
US 10-year Treasury yield rises to ~5.32%
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
     
BOFA SAYS BEAUTY HAS STAYING POWER AS CONSUMER GROWTH FADES
 
Beauty is emerging as a bright spot in an otherwise sluggish consumer sector, with demand accelerating as companies lean on innovation, advertising, and new sales channels, BofA Global Research said on Wednesday.
Revenue across 27 listed beauty companies tracked by the brokerage rose 5.2% year-on-year in the second quarter of 2026, up from 4.2% in the first quarter and marking the strongest growth in two years. 
Southeast Asia and the Pacific remain solid, while Korea and Japan have softened. LATAM is expected to slow in the third quarter on weakness in Mexico, though Brazil could improve from the fourth quarter and 2027 post-election.
Among companies, APR Cosmetics, owner of Medicube, led growth at 185.5%, while Bloomage 688363.SS was the weakest at -21.7%. L'Oreal OREP.PA grew 6.3%, outpacing peers despite its larger scale, as per BofA.
In the beauty sphere, online channels are also becoming more important for both purchases and product discovery. Traffic at beauty retailers like Sephora, Ulta and Nykaa remained strong. 
     Meanwhile, TikTok Shop is gaining traction, particularly in hair care where sales reached about $240 million, as skincare and hair care lend themselves more naturally to online discovery than makeup, though Amazon AMZN.O remains significantly larger.
Attention now turns to September-quarter earnings, with LVMH LVMH.PA first to report. The luxury group’s Sephora recently partnered with Marks & Spencer MKS.L to expand its UK reach.
Strong US beauty demand is also benefiting Chinese suppliers, with exports of hair products to the United States rising 12.4% to $1.3 billion in the first half of 2026, as platforms such as TikTok and Instagram help drive demand.
Amid Middle East disruptions and rising inflation, consumers are gravitating toward small, feel-good purchases, a trend L’Oreal calls the “dopamine effect of beauty,” helping the sector return to growth despite a weak macro backdrop.
     
(Kanishka Ajmera)
     *****
     
EARLIER ON LIVE MARKETS:
YIELDS, OIL PRESSURE US STOCKS AHEAD OF FED MINUTES CLICK HERE
S&P 500 BREAKOUT FACES ITS FIRST TEST CLICK HERE
TSMC EARNINGS COULD CAUSE ANOTHER ROUND OF CONSENSUS UPGRADES CLICK HERE
WHY TRADERS MAY WANT TO WATCH REAL ESTATE AROUND MIDTERMS CLICK HERE
EU DEBT SELLOFF OVERDONE, UKRAINE STILL KEY RISK, UBS SAYS CLICK HERE 
EUROPEAN STOCKS JOIN EURO LOWER, FRENCH BONDS SELL OFF CLICK HERE
EUROPE BEFORE THE BELL: NOT QUITE AS BULLISH CLICK HERE
MORNING BID: WHO'S THE BOSS? CLICK HERE