Blowing Hot and Cold over Covid

I stepped out of my front door this morning without a face mask.  For a brief moment I forgot we were in the midst of a pandemic.  Mask wearing is mandatory where I live, and provides a constant visual reminder on the streets that life is far from normal. I'm sure I'm not alone in yo-yoing between a sense of "business as usual" and the depressing realization that after nine months of lockdowns, restrictions and more, the end remains a long way off.  The first vaccines were administered in Britain on Tuesday, where the media was in a celebratory mood, overlooking the inconvenient fact that it had been developed in Germany.  But infection rates are on the rise there and in many other countries bracing themselves for a third wave. In the world of diamonds there is a comparable see-saw of good news followed by bad, which may leave you wondering whether things are getting better or worse. On balance I have no idea.  Here are some key of the key plus and minus points that have added to my confusion:

PLUS: India, by far the world's biggest diamond manufacturer, saw gem and jewelry exports rebound in November - down just four per cent year on year - as manufacturing and rough imports approached pre-Covid levels. Pent-up demand and confidence in gold saw solid sales over Diwali.

MINUS: Botswana, the world's top diamond-producing country by value, saw exports fall 42 per cent to $1.49bn in the first nine months of 2020 and is now officially in recession.

PLUS: Signet, the world's largest retailer of diamond jewelry reported revenue up 9.5 per cent year on year for three months to the end of October. Total sales were down more down by over third from February to July.

MINUS: Thanksgiving and Black Friday both fell flat in the USA. Jewelry sales on Black Friday were down 54 per cent on last year and overall spending over Thanksgiving on all items was down 14 per cent.

PLUS: Retail giant Chow Tai Fook saw profits rise 45 per cent year on year for the six months to September, despite lower sales across stores in China.

MINUS: The volume and average price per carat of polished diamonds imported by the USA - the world's biggest market - remain significantly down (-39 per cent and -15 per cent respectively, January to September 2020 year on year).

PLUS: Alrosa's 2020 rough sales have been outstripping those last year since August, though dismal performances from April to July will severely dent its annual total. (2019 total was $3.34bn. So far during 2020 it has sold $1.89bn.)

MINUS:  The vast majority of watch and jewelry shows and events have been canceled -  AGTA Gemfair Tucson; Israel's International Diamond Week; JCK Tucson; Gem & Jewelry  Exchange; Gemworld Munich; Watches and Wonders 2021 to name but a few. Many are staging virtual alternatives, but they are just that: Virtual and alternative.

PLUS: De Beers sold $450m of rough at an extended November sight, up on the 2019 figure and reported "steady" demand.

MINUS: Dominion, the world's third biggest supplier of diamonds by carat, closed its Ekati mine in Canada as the pandemic struck and filed for insolvency. It is now being bought, together with $70m of debt.

PLUS: Jeweler Luk Fook plans to open 250 new stores in mainland China, despite sales in Hong Kong falling 68 per cent.

MINUS: Pandora expects weak sales over the holiday period as many European countries re-introduce lockdowns and curfews.

PLUS: Tiffany reported a 52 per cent increase in Q3 net earnings to $119m, defying earlier claims by on-off-on buyer LVMH that it had been mismanaged.

MINUS: Global luxury spending for Q4 will remain well below last year (Hong Kong & Macau -35 per cent, EU -36 per cent, Americas -27 per cent, Japan -24 per cent) according to Bain predictions.

PLUS: Watch and jewelry sales in the US have been growing steadily in the four months to September (up 13.7 per cent year on year) as they recover from a catastrophic collapse in April. Specialty jewelers suffered most acutely, but have rebounded dramatically.

MINUS: Jewelry sales in Hong Kong, together with those of timepieces and other valuable gifts, were down over a quarter in September and year on year, despite a lull in coronavirus.

Years ago, on a family holiday to DisneyLand Florida (now known as Walt Disney World Resort) the kids' favorite ride was Test Track, simulating the rigorous testing procedures used by General Motors on its concept cars. One moment you're speeding through the "heat room" at 65mph, the next you're in the "cold room".  It literally blows hot and cold.  The extremes are manageable for a second, but after that you fry or freeze.  It's blowing hot and cold in diamonds, in jewelry, in my head, in your head, in everybody's head. Business as usual, ongoing pandemic, or a weird cocktail of both? Welcome to an uncertain world.

Have a fabulous weekend!