While much of the world is focused on the Strait of Hormuz, it’s worth paying attention to what’s happening in China.

Beijing is sending mixed signals again.

On one hand: New stimulus measures aimed at the real estate sector and consumption.

On the other: Increased military activity and threats against Taiwan.

Is this a deliberate strategy? Creating external tension to justify domestic stimulus and distract from internal problems?

A classic “rally around the flag” move.

If it works, it could be good news for European luxury stocks.

Chinese consumers are among the biggest buyers of Louis Vuitton, Gucci, Chanel and Ferrari.

A stronger Chinese economy usually translates into higher luxury spending.

This might be why LVMH, Hermes and Richemont could be unexpected winners from Beijing’s latest moves.