🥰 Fund managers have gone all fuzzy for these investments

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Today's big stories

Nike's third-quarter results were a slam dunk, and they might just fire up the competition
Here’s a look at where fund managers are investing now – Read Now
The UK government’s debt jumped to a record high in November

Game On

What’s Going On Here?

Nike slam-dunked competition-shaking results on Tuesday, and the crowd (or, uh, markets) went wild.

What Does This Mean?

Supercharged interest rates have been, like, totally killing Nike’s vibe this year: it’s a growth stock, after all, so higher rates tamper down the value of the firm’s future earnings. But it looks like Nike’s got its swag back: the footwear giant’s out-of-sight results revealed that sales were 17% higher than the same time last year (tweet this), and extra-profitable online sales were up an immense 25%. Even Nike’s Chinese sales rebounded, despite the country reeling from the effects of lingering lockdowns. Markets said “nice one, Nike”, and met the results with a gaggle of high fives.

Why Should I Care?

For markets: Trends change, but quality lasts.
“Quality investing” is basically what it says on the tin: investors buy good-looking businesses that are strong enough to ward off competitors in their growing industries. Sounds solid, but that’s the problem: businesses like that are honey to investors, and all that buzz can mean their share prices end up overhyped from time to time. Remember too, that even so-called quality businesses lose their sneaked-up footing sometimes – and when they do, investors can lose their overpriced shirts as well. The best ones, though, can ride out the speedbumps with style, and Nike’s results could well land the firm in that limited-edition batch.

The bigger picture: No discounts here.
Nike’s results will be a beacon of hope for struggling retailers right now. See, budget-squeezed shoppers have been cutting down on nice-to-haves, so stores have been relying on holiday discounts to shift their stock – a recipe for worse-for-wear profit margins. Nike, though, has managed to bring its (albeit growing) inventory down to below peak levels, and – most importantly – full-priced kit is flying out the doors. Layer on record-breaking Black Friday and Cyber Monday sales, and Nike’s feeling pretty rad about what’s to come.

You might also like: Why it might be time to buy quality stocks.

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Analyst Take

Fund Managers Say They’re Feeling Festive. Here’s What’s Under The Tree.

By Luke Suddards, Analyst

Bank of America sends out a monthly survey to ask a few hundred big-time global fund managers what they think about markets and the economy.

And this month, they said they’re feeling a lot more cheerful.

They see global economic growth getting higher, and inflation moving lower.

What’s more, they talked about which assets they like now – and for 2023.

So that’s today’s Insight: where fund managers are investing now.

Read or listen to the Insight here

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*Motley Fool Stock Advisor returns are 339% as compared to the S&P 500 returns of 109% as of November 2, 2022. “All In” average returns as of November 2, 2022. The 102 stock occurrences refer to all re-recommendations inside of Motley Fool Stock Advisor. All other returns are updated during market hours. Past performance is not a predictor of future results. Individual investment results may vary. All investing involves risk of loss.