Finimize - ✔️ Nike went and did it

What’s going on here?

Nike’s better-than-expected results weren’t exactly a three-pointer, but they showed the sports retailer can still dribble like the best of ‘em.

What does this mean?

Nike’s stock price has been stuck on the bench lately, so Thursday’s better-than-expected results will have investors going wild. Or mildly enthusiastic, at least. Stateside sales were lower than this time last year, which isn’t ideal seeing as it’s Nike’s most important market. But they were still beyond what cautious investors had predicted. Plus, business was better overseas: Chinese sales were up 12%, if you strip out the impact of currency movements. And by building in decent margins, Nike wrangled a better-than-expected overall profit, calming analysts’ worries about mounting inventory levels.

Why should I care?

The bigger picture: Grab an energy drink, stat.

Nike was on a tear a while back, with sports buffs sharpening up their gym outfits after a couple of years spent doing press-ups in their bedrooms. But once the excitement wore off and the sofa looked more appealing than the treadmill, Nike’s profit started slipping. Now, its stock price has drifted below pre-pandemic levels, a sign that investors believe Nike’s past its peak, rather than just temporarily out of breath. But with promises of sharp new releases ahead of next year’s Olympics, there could still be gas in the sports titan’s tank.

Zooming out: Life isn’t Yeezy.

Still, Nike’s issues are nothing compared to Adidas’s: the European rival’s bottom line has barely budged for a decade. That could have something to do with the twosome’s choice of spokespeople. Nike’s sports stars have been pulling in cash for the brand, but Adidas’s partnerships with big music names have been more hit or miss – and they haven’t been without controversy, either. Still, Adidas is a major name with a loyal fan base, so it could live up to its tagline: “impossible is nothing”.

What’s going on here?

Eurozone inflation dipped by more than expected on Friday to land at a two-year low.

What does this mean?

Record scratch: inflation in the eurozone just fell from last month’s 5.2% to 4.3%, coming in lower than investors expected and skimming levels last seen in October 2021. That’s mainly because the cost of energy calmed down, but still, core inflation – which doesn’t count volatile energy and food costs – also chilled by more than expected. European inflation certainly seems to be on a comedown, but not all of the region got the memo: Germany’s prices relaxed by a lot, but inflation just rebounded to hit above 3% in Spain.

Why should I care?

For markets: Time for a final summer break.

Investors are crossing their fingers that the latest data might encourage the European Central Bank (ECB) to call it quits on its long run of interest rate hikes when it meets later this month. That would take the heat off stocks and bonds in the region, which explains why European government bonds rallied and stock markets ticked up after the data came out.

The bigger picture: Run for the Dolomites.

Let’s not get ahead of ourselves, though. Inflation’s headed in the right direction, but it’s still more than double the ECB’s 2% target. So despite renewed hopes for a pause in rate hikes, the central bank may need to stay firm. Investors might be hoping for the best, but they’re bracing for the worst: they expect a lengthy period of high borrowing costs, which make it harder for both businesses and everyday folks to get their hands on extra cash. Factor in that it’ll take a while for the full negative economic impact of those rate hikes to reveal itself, and the risk of rising oil prices sparking another inflation jolt, and you might want to keep an eye on the currents before you dive into the Mediterranean sea.