Finimize - 👟 Nike took a tumble

Shoppers ditched Nike, and so did investors | US core inflation came in (nearly) on the money |
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Hi Reader, here's what you need to know for June 29th in 3:13 minutes.

☕ Finimized over an Americano at Kafe Muzeum in Tirana, Albania (☀️30°C/86°F)

Today's big stories

  1. Sportswear giant Nike dropped a dull full-year forecast, and investors went running
  2. Swiss bank UBS sees US stocks in a new “Roaring Twenties” – Read Now
  3. US inflation came in fairly close to target, but that didn’t convince traders to change their rate cut expectations

Just Boo It

Just Boo It

What’s going on here?

Nike handed over an uninspiring full-year outlook, so investors made their thoughts known.

What does this mean?

Nike’s sales were nearly 2% lower last quarter than the same time last year. What’s worse, there’s no sign that the issues plaguing sales – like a pullback from shoppers in China – are letting up. That explains why the world’s biggest sportswear company now expects sales to be a worse-than-expected 10% lower this quarter than the same period last year. And that’s fed into the outlook for the year as a whole: Nike predicts sales will be down from last year, while analysts had hoped for a tiny 1% increase. Investors bolted, sending shares down 14% on the day – and that’s on top of the 12% dip Nike’s already suffered this year.

Why should I care?

Zooming out: Even the not-so-well-laid plans…

Eager to make more money from each sale, Nike’s been weaning itself off wholesalers and investing in its own channels instead. So far, that decision hasn’t helped, but hindered: sales from Nike’s own website, app, and stores fell 8% last quarter from the same time last year. That focus might be better placed elsewhere, then. Analysts believe the company isn’t spending enough time and money designing innovative products – the very thing that earned Nike the “it factor” in the first place.

The bigger picture: The kids are alright.

Nike needs to stand out now more than ever, with newcomers like On Holding AG and Deckers Outdoor – newly famed for Hoka running shoes – chipping away at its share of the market. See, smaller companies are using social media to build strong communities, threatening the status quo that legacy brands spent decades establishing. Just look at the cosmetics industry. Glossier and Fenty Beauty have stolen customers from major brands by focusing on more affordable pricing and makeup for diverse skin tones, winning over shoppers who have long been neglected by luxury names.

You might also like: How to invest in sports.

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Analyst Take

Call It A ’90s Reboot Or A New Roaring Twenties, US Stocks Are Looking Retro Chic

Call It A ’90s Reboot Or A New Roaring Twenties, US Stocks Are Looking Retro Chic

By Russell Burns, Analyst

Wall Street could be in a new “Roaring Twenties”, says UBS, as economic growth and stock exuberance take investors back to an earlier time.

Now, that doesn’t mean it’s going all the way back to flapper dresses and fedoras. Instead, US markets appear to be partying like it’s the 1990s.

Here’s how you can take advantage of this rollicking moment.

That’s today’s Insight: US stocks and the new “Roaring Twenties”.

Read or listen to the Insight here

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But not this time: award-winning investment app Plum is open for investors. The equity crowdfunding campaign only launched last week, but 4,200 investors have already raised £2 million ($2.5 million).

Plum has already built up a two-million-strong user base across ten markets, holds over £1 billion ($1.2 billion) in assets under management, and its revenue is nearly doubling by the year.

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Toeing The Line

Toeing The Line

What’s going on here?

US core inflation rose 2.6% from a year ago in May, landing within touching distance of the Federal Reserve’s (the Fed’s) elusive target.

What does this mean?

Headline inflation stayed the same from April’s release, marking the first month without an increase this year. Although, the most important number for the Fed is core inflation, which excludes volatile food and energy prices. That was up only 0.1% last month, and 2.6% compared to last year. In other words, it’s getting closer to the Fed’s 2% target. Still, it’ll take a long time for Americans to let their guards down: even though their average take-home income rose a better-than-expected 0.5%, consumer spending was lower than expected.

Why should I care?

For markets: The scissors have child-lock on.

Despite this promising data, traders still doubt that interest rates will be cut at the Fed's next meeting in July. Instead, they’re predicting a 60% chance of a cut in September, with maybe another one before the year’s end. Remember, too, that the Fed won’t act until it sees a sustained pattern in the numbers. And even with rates at a 16-year high, the economy and stock markets have stayed stronger than most expected. So for the Fed, there’s no need to rush.

The bigger picture: A world wide web.

The higher a country’s interest rates, the more investors tend to flock toward its currency. So the US dollar is basking in glory these days, leaving the currencies of countries with lower rates – like Japan – to watch with envy. Higher rates haven’t been kind to emerging markets, either. They often borrow in US dollars, so their payments bump up when the greenback strengthens. That said, the US hasn’t gotten off scot-free: companies that rely on debt are feeling the pinch from higher borrowing costs – we’re looking at you, private equity and real estate.

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💬 Quote of the day

"I have often said that the lure of flying is the lure of beauty."

– Amelia Earhart (an American aviation pioneer and author)
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The events that every investor should know about

Every investor should be keeping up with global elections.

The outcome can directly dictate a country’s fiscal policies, which feeds straight into stock market performances – and that impact isn’t always localized.

So with the UK and France headed to the polls soon, you need to know how different outcomes could play out, what the market expects, and what happens if those predictions are wrong.

And most importantly, you should know how to prepare your portfolio before it all goes down.

Join IG’s chief market analyst Chris Beauchamp at our next event, then, and find out what investors need to know before the votes are counted.

Get Your Ticket

✅ Green Bonds Are Headed For A Record Year

Issuance of green, social, sustainable, and sustainability-linked bonds hit a record high in the first quarter.

And what's more, investors seemed all too happy to gobble them up.

Here's what's going on, and why you might want to take note – no matter your green credentials.

Read The Quicktake

🎯 On Our Radar

1. Home away from home. A weekend break isn't always worth it.

2. You should take crypto protection seriously. Here’s what makes the OG blockchain safer than Fort Knox.*

3. Not in the spirit of things. Here’s how Ouija Boards really work, ghosts and all.

4. The metaverse could change everything. Prepare yourself for a new investing landscape.*

5. Ain’t no mountain high enough. Meet the four-year-old who’s climbed more peaks than you.

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🌍 Finimize Live

🤩 Coming up soon...

All events in UK time.
🗳️ Election Special: What Investors Need To Know Before Voting: 12pm, July 3rd
🏔️ Gaining An Edge Beyond ETFs: 8pm, July 9th
💃🏼 Finimize Ladies Investing Club: 6.30pm, July 18th
💰How To Invest Like A Modern Warren Buffett: 5pm, Aug 14th
🔨 Five Portfolio Hacks For Busy Investors: 5pm, Sept 12th
🚀 2024 Modern Investor Summit: 2pm, December 3rd

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