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The US market is witnessing a slowdown. While the presidential elections are going on on one hand, it is yet to be decided who will be the new president of the country. Along with this, news is coming that the condition of the US market is not very good. In such a situation, a news has created an atmosphere of fear for American investors. Lipstick has become a topic of discussion on American social media. Let us know what is the connection between lipstick and the US market. And why is there this debate?
Warren Buffett's investment litmus test in the US market
The reason for this is Berkshire Hathaway owner Warren Buffett, who is counted among the richest people in the world. It is also said about him that his investment is considered the litmus test of the American market. If he invests money in a company or withdraws money from a company, then the trend of the market is measured by this.
Warren Buffett's investment caused a stir
Meanwhile, Warren Buffett has invested in a cosmetics company. Interestingly, lipstick sales increase during recessions. Now Warren Buffett is believed to have predicted the recession. To make a profit from this, he has invested in a cosmetics company.
What is Lipstick Index?
The term was coined by Leonard Lauder, chairman of ST Lauder. Leonard Lauder is a big American investor. The recession of 2000 saw a rapid increase in lipstick sales among women. The production of cosmetics increased during the Great Depression in the US from 1929 to 1933. Something similar was seen after the global recession of 2008. A lot of study was done on the reason behind this. It is believed that women with better financial status buy more clothes. Also, women like to buy lipstick even in bad times.
Expert opinion on the effect of lipstick
Experts on the effect of lipstick say that in difficult times, women are turning to cheap but attractive beauty products to make themselves feel better. This is an easy and cheap way to maintain their confidence. Many studies have also shown that cosmetic companies did not suffer as much during the recession as was estimated. A big reason for this is lipstick.
Let's find out how much truth is there in this
The terrorist attacks in the United States on September 11, 2001 plunged the country into an economic crisis. According to Investopedia research, lipstick sales doubled during this period of recession. There was an economic recession for 19 months between 2007 and 2009. This recession left millions of Americans unemployed. Despite this crisis, major cosmetic companies such as L'Oreal and Estee Lauder reported strong revenue growth. During the Great Depression in the United States between 1929 and 1933, sales of cosmetics increased, even as industrial production was halved. In particular, lipstick sales increased, while sales of expensive cosmetics declined.
Why is the fear of recession increasing in America?
Several key economic indicators in the US are showing signs of weakness. Unemployment claims rose sharply from the January low and the unemployment rate reached a three-year high of 4.3 percent in July. In addition, the manufacturing PMI fell to a 9-month low.
